The luxury-goods industry’s first slowdown since the pandemic is separating the winners from the losers.

Kering SA warned that its flagship Gucci brand will see a drop in profitability this year, with no sign of a rebound in 2024. The Italian label is getting hit harder than rivals as internal turmoil worsens the effect of weakening global demand.

The performance of the group controlled by the Pinault family contrasts with that of French rival Hermes International, which has more rich customers lining up for its $10,000 handbags than it can accommodate, insulating it from the downturn.

The first signs of a slowdown appeared about a year ago, when shoppers in the US curbed their spending on entry-level treats. Then in China, an uncertain macroeconomic backdrop and high youth unemployment dashed hopes consumers would splurge on bags and shoes after the strict lockdowns of last year. They have spent, but not as much as hoped.

Even LVMH Moet Hennessy Louis Vuitton SE, the luxury titan with 75 labels ranging from Christian Dior to Bulgari, disappointed investors earlier this month. Growth at its crucial fashion and leather goods unit fell short of estimates, while its wines and spirits business tumbled as demand for Cognac faltered in the US.

“The polarization of the sector continues,” said Carole Madjo, an analyst at Barclays Plc in London. “Names such as Hermes are currently outperforming the market thanks to a more resilient business model and lower exposure to aspirational consumers.”

Italian cashmere specialist Brunello Cucinelli SpA has also been an outperformer, surfing the “quiet luxury” wave. Its shares are up 12% this year, about half the increase in Hermes over the same period. Ermenegildo Zegna NV, Prada SpA — behind the hot Miu Miu brand — and Moncler SpA have likewise seen gains.

By contrast, Kering, Cartier owner Richemont and Burberry Group Plc have fallen by 10% or more this year, while high-end shoemaker Salvatore Ferragamo SpA has dropped almost 30%. LVMH, which in April attained a $500 billion market capitalization, has since seen its valuation shrink by about $140 billion.

Now luxury houses will have to navigate risks associated with geopolitical tensions in the Middle East. Hermes and Kering both flagged those risks this week — notably a potential impact on tourism.

The slowdown follows a period of robust demand when consumers with pandemic savings splashed out on luxury products. LVMH warned in July the cool down was coming and reiterated that message again this month, saying that its Christian Dior brand wouldn’t continue to see growth rates of 30% per annum.

At LVMH, some “quieter” brands such as Loro Piana, which sells logo-free €2,900 cashmere sweaters, or Spanish label Loewe, known for its creations under Jonathan Anderson, have outperformed the fashion and leather goods unit. This division includes the flagship Louis Vuitton and Christian Dior labels, known for their bold logos and monograms.

In keeping with the move away from ostentation, Phoebe Philo, who gained a cult following among fashionistas for her modern, simple and logo-less designs at Celine, is set to launch her own brand on Oct. 30, backed by LVMH.

--With assistance from Gina Turner.