Retail investors looking for resilient sectors may want to turn their attention to U.S. beauty companies and premium fashion labels that offer luxury without the steep price tag, according to Eric Fisch, senior vice president and sector head of retail and apparel at HSBC.
Speaking about opportunities in retail, Fisch pointed to two areas he believes are primed for growth: U.S.-based beauty and skincare companies and what he calls “accessible luxury” brands. Both, he says, are benefiting from global shifts in production and consumer behavior.
Domestic Production Shields U.S. Beauty Sector From Tariff Risk
Unlike many European and Korean competitors, U.S. brands tend to import only components and handle packaging and assembly domestically. That setup gives them a leg up when tariffs hit. “That puts them at an advantage,” Fisch said, especially as Korean brands continue to gain traction in the U.S. market.
2025 has indeed seen a growing preference for locally owned brands, challenging the dominance of global multinational companies. According to a recent McKinsey report, 47% of global consumers now consider locally owned companies a key factor in their buying decisions. The trend is especially pronounced in Canada and the U.S., where support for local brands has surged significantly since the first quarter of the year.
Accessible Luxury Captures Cautious Shoppers
The other bright spot is so-called accessible luxury. These are the brands that sit just below the ultra-high-end names. Fisch says the top luxury houses have hiked prices dramatically over the past five years, and they’re not likely to shift production in response to tariffs.
“The true luxury names have raised prices considerably over the last five years. With tariffs, they’re not going to diversify production. It’s going to be made where it’s made. And so anyone who sits right below that, that aspirational shopper who is in ultra high net worth, was really splurging on the luxury purchase, is more likely to buy something down a category,” he elaborated.
That leaves room for more affordable premium brands to scoop up aspirational shoppers who are still spending, but more selectively.
