LVMH expects a difficult few years for the luxury sector. Last quarter, its sales rose just 3 % as Chinese customers became reluctant and the ‘pandemic boost’ is now completely over.
Over its peak
The Louis Vuitton and Dior owner sees growth slowing down due to a waning demand for luxury goods. Group sales rose 3 % to 20.7 billion euros, but negative currency effects pulled sales down by 4 %. It is a remarkable turnaround after years of strong growth, when luxury shoppers went “revenge shopping” after and between the pandemic lockdowns.
In the key Asian market (excluding Japan) comparable sales fell 6 % as Chinese consumers remained more cautious. In the United States and Europe, however, sales were still up 2 %. Flagship Louis Vuitton stagnated in the US, while sales in Europe were “slightly negative”, according to CFO Jean-Jacques Guiony. The group’s luxury drinks, such as cognac and champagne, were the weakest performers.
Guiony expects gradual improvement, but spread over “several quarters, or even years” and “it will not be spectacular”, as the Financial Times quotes him. Indeed, consultancy firm Bain sees the luxury market growing by only 1 to 4 % this year, compared to 8 to 10 % growth in 2023.
