Chinese luxury slowdown drags down LVMH, Hermes and Kering, erasing billions in market value

A prolonged slowdown in China is sapping demand for high-end fashion, leaving LVMH, Hermes and Kering with results that missed even lowered expectations. LVMH’s fashion and leather goods segment fell by a mid-teens percentage among Chinese customers, and Kering’s sales to the market dropped between 15 and 20 % in Q3, an acceleration from the previous quarter. Hermes recorded a 2 % global decline in its ready-to-wear and accessories division, citing a recent Chinese stock-market dip and a new 20 % offshore dividend tax.

Across Europe’s six largest listed luxury firms, market capitalisation has shrunk by €251 billion this year, with LVMH and Hermes bearing the steepest losses. While Hermes saw a 10.8 % rise in Birkins sales and jewellery lines performed well, overall luxury spending in the United States has also softened as markets cool. Analysts say the sector is now focused on cost-efficiency while waiting for Chinese shoppers to return.