Luxury giant LVMH suffers its first quarterly sales drop since pandemic

LVMH has suffered its first quarterly sales drop since the pandemic after a slowdown in demand for high-end fashion.

The French group, whose brands include Givenchy, Celine and Louis Vuitton – where actress Zendaya is a global ambassador – posted a 3 per cent drop in sales for the three months to September.

It was the first decline since sales tumbled at the start of 2020 when Covid-19 struck. 

A slowdown in China – the world’s second largest economy and a crucial market for luxury goods – has hit demand for expensive handbags, watches and clothes.

Sales at LVMH’s fashion and leather goods division – the biggest part of the business and home to brands Louis Vuitton and Dior labels – slipped 5 per cent. 

With this division seen as a bellwether for the wider industry, concerns are mounting over how rivals such as Hermes and Gucci owner Kering are faring. British labels Burberry and Mulberry as also struggling.

But LVMH, which owns 75 luxury brands, said its numbers showed ‘good resilience’ as it posted a still impressive £13.3billion of sales for the third quarter. 

After a post-Covid spending boom, the luxury industry has struggled as demand dwindled.

Business has proved especially tough in China, where consumers have been put on edge by an economic slowdown and a property market crisis.

LVMH shares slipped almost 2 per cent in Paris before the results were announced after the market had closed – taking losses so far this year to 13.5 per cent. 

All eyes will be on the stock when trading resumes this morning.

The share slump has been felt by LVMH chief Bernard Arnault, one of the world’s richest men.

LVMH yesterday warned of ‘an uncertain economic and geopolitical environment’ but added that it would ‘draw on its powerful brands and the talent of its teams to reinforce its global leadership position in luxury goods once again in 2024’.

Aarin Chiekrie at investment platform Hargreaves Lansdown said the firm ‘will be hoping that this proves to be more of a blip rather than a new trend of some of LVMH’s high-end goods falling out of fashion’.

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