Billions wiped from LVMH, as Champagne & fashion sales slip at luxury giant
Shares in the world’s largest luxury-goods company slipped more than 7% in early trading this morning, after LVMH reported lackluster sales growth yesterday. Bernard Arnault’s Paris-listed company, which owns Louis Vuitton, Dior, Givenchy, and 70+ other luxury brands, was hit particularly hard by weaker demand in China.
Poppin’ (fewer) bottles
The biggest decline came in the company’s Wines & Spirits division. Despite housing iconic Champagne labels like Moët & Chandon, Veuve Clicquot, and Dom Pérignon, sales fell 7%, compounding a miserable year for the division, where revenue has dropped every quarter.
The company’s crucial Fashion & Leather Goods brands weren’t looking much sharper — organic sales (which strips out currency impacts) fell 5%, a significant drag on the company’s bottom line considering that the division accounted for 49% of LVMH’s revenue.
LVMH’s sales in Asia (excluding Japan) fell 16% in Q3, driven predominantly by slumping demand from Chinese consumers. Over the years, China’s penchant for luxury goods, and LVMH brands in particular, has helped propel the luxury house to become one of Europe’s most valuable companies and Arnault to become one of the richest people in the world.
Considered a bellwether for the industry, LVMH’s latest woes have dragged other luxury stocks like Burberry, Kering, and Richemont down in the last 24 hours.
LVMH’s sales in Asia (excluding Japan) fell 16% in Q3, driven predominantly by slumping demand from Chinese consumers. Over the years, China’s penchant for luxury goods, and LVMH brands in particular, has helped propel the luxury house to become one of Europe’s most valuable companies and Arnault to become one of the richest people in the world.
Considered a bellwether for the industry, LVMH’s latest woes have dragged other luxury stocks like Burberry, Kering, and Richemont down in the last 24 hours.
