LVMH has reported a decline in product sales due to sluggish demand from Chinese consumers. A recent picture captures an LV store in a Beijing shopping center. According to reports from Singapore’s Lianhe Zaobao, this marks the first drop in sales for LVMH’s fashion and leather goods since the pandemic began, with the company’s performance being significantly affected by decreasing consumer demand in China.
On October 15, Bloomberg reported that LVMH announced a 5% decrease in organic revenue for its fashion and leather goods division in the third quarter. Analysts had previously forecasted a slight increase instead. In contrast, the same period last year saw a 9% increase in revenue for the division. This represents the worst quarterly performance since the global pandemic lockdown began in the second quarter of 2020. The group’s overall sales fell by 3%.
“Right now, most markets, including China, are facing economic challenges,” stated LVMH’s Chief Financial Officer Jean-Jacques Guiony during the quarterly announcement. “Consumer confidence in China has fallen to historical lows that mirror the levels seen during the pandemic.”
Bloomberg further notes that Chinese consumers have slowed their spending on high-end goods amid concerns regarding an economic slowdown and a crisis in the real estate market. These worries prompted the Chinese government to roll out a comprehensive set of measures last month aimed at revitalizing economic growth.
Guiony remarked that it is currently difficult to gauge the potential impact of these measures on demand but emphasized, “This indicates that they are taking the issue very seriously.”
