Luxury giant LVMH suffers its first quarterly sales drop since the pandemic

LVMH has suffered its first quarterly sales decline since the pandemic following 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 in the three months to September.

It was the first drop since sales fell in early 2020 when Covid-19 hit.

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 clothing.

Sales at LVMH’s fashion and leather goods division, the bulk of the business and home to the Louis Vuitton and Dior brands, fell 5 percent.

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

But LVMH, which owns 75 luxury brands, said its figures showed “good resilience” as it posted a still impressive sales of £13.3bn in the third quarter.

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

Business has been especially difficult in China, where consumers have been unnerved by an economic slowdown and a housing market crisis.

LVMH shares fell nearly 2 percent in Paris before results were announced after the market closed, taking year-to-date losses to 13.5 percent.

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

The fall in shares has been felt by the president of LVMH, Bernard Arnault, one of the richest men in the world.

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

Aarin Chiekrie of investment platform Hargreaves Lansdown said the company “hopes this turns out to be more of a blip than a new trend of some of LVMH’s high-end products going out of style.”