LVMH's fashion division keeps getting worse Third-quarter results showed a -5% decline driven by the Chinese market

After months of hopes for a recovery in the luxury sector — which has been grappling with a crisis now dragging on for several years — the new Q3 results from LVMH seem to once again push the possibility of a turnaround further out of reach. According to official data published yesterday afternoon, after markets closed, the world's largest luxury conglomerate posted a 5% decline in its fashion and leather goods division, a result significantly worse than the -1.8% analysts had forecast. The group's total revenue reached €18.5 billion, with organic growth of 1% compared to the same quarter of the previous year. The results were weighed down above all by the slowdown in the Chinese market, which since 2024 has continued to represent one of the main obstacles to the sector's recovery.

Why does the Chinese market keep holding back LVMH's growth?

As reported by Business of Fashion, LVMH's sales in Asia, excluding Japan, fell 5%, well beyond the -1.3% analysts had anticipated. The Chinese real estate crisis, combined with a broader slowdown in consumer spending, continues to shape the purchasing habits of a clientele that for years was one of the primary engines of European luxury growth. Meanwhile, the price increases implemented by the maisons during the post-pandemic boom have progressively driven away aspirational customers.

The problem concerns above all Louis Vuitton and Dior, the group's two most important brands. According to the Financial Times, Louis Vuitton also had to contend with the fallout from a legal dispute with Chinese tea brand Molly Tea, which the maison accused of trademark infringement. The controversy, which arose over a floral motif similar to those found in Chinese tradition, triggered a nationalist backlash on local social media, helping to damage the brand's image over the summer.

Can creative directors alone turn sales around?

Then there is the question of creative directors, who in recent years have been at the centre of a genuine generational changing of the guard at the helm of the maisons. While LVMH has highlighted the strong performance of the collections by Nicolas Ghesquière and Pharrell Williams for Louis Vuitton, it has also pointed to particularly strong demand for the ready-to-wear and leather goods by Jonathan Anderson at Dior. According to the Financial Times, group CFO Cécile Cabanis stated that Dior's sales had been positive since the start of the year.

It remains difficult to gauge how much these new creative directions are actually contributing to financial results, given that LVMH does not publish sales data for individual brands. The relentless succession of debuts, runway shows and campaigns appears to have restored media attention to the maisons, while converting that interest into actual purchases will take more time.

Does the future of luxury lie in jewellery?

Some positive signals are coming from the group's other divisions. Both the watches and jewellery and wines and spirits segments posted 6% growth, while overall sales in the United States rose 5%. According to Business of Fashion, the success of jewellery also reflects a different perception of value among consumers, who tend to view a piece of jewellery as a more lasting investment than a handbag or fashion accessory.

The American market, which has so far offset some of the losses in Asia, is nevertheless showing the first signs of slowing. As reported by the Financial Times, credit card data published by Citibank points to a spending decline on luxury goods of at least 4% over the past three months. For LVMH, whose market value has more than halved from its 2023 peak, recovery therefore appears set to take longer than expected. And if not even the world's largest luxury group can manage to reverse course, one has to wonder how much longer the sector can rely on new creative directors, price hikes and multimillion-dollar campaigns to persuade consumers to return to stores.