LVMH Moët Hennessy Louis Vuitton SE this week said that in the third quarter, which ended 30 September, sales in mainland China fell by a double-digit percentage, and purchases by Chinese shoppers abroad also declined.
The group pointed to a 5% decline in organic revenue in the “Asia, excluding Japan” segment. Chief Financial Officer Cécile Cabanis said on a conference call with analysts that overall demand improved at the end of the quarter.
According to the company, purchases by Chinese customers abroad fell by several percent. The report said that consumers inside China have become more cautious and some shoppers are switching to cheaper domestic brands; higher taxation on overseas assets and a weaker stock market have also weighed on spending by wealthier customers.
“The news flow in China over the summer was not very positive,” Cabanis said. “So it really dented sentiment and created a short-term subdued environment in China.”
Jacques Roizen, co‑founder of Shanghai consultancy Foresight Performance Partners, said: “Everyone is struggling right now. The LVMH portfolio, as a large company, is an industry benchmark, and other publicly traded firms in the luxury segment will not be able to significantly outperform it.” An index is a set of shares that reflects price movements in the sector.
The quarter also referenced reputational damage to the Louis Vuitton brand over a trademark dispute with local chain Molly Tea. Cabanis said that, while it is hard to quantify the impact, consumer pushback hurt Louis Vuitton, at least at the start of the period.
