LVMH stock prices plunged, falling 7% on Wednesday after the luxury conglomerate announced a 5% drop in third-quarter sales. The decline comes as the industry continues to worry about a slowdown in luxury spending due to economic headwinds.
Analysts had expected growth to be between 0% and 2%, but the Louis Vuitton owner’s third-quarter report suggests a big miss, according to Business of Fashion. Arguably the most powerful company in the luxury goods industry, its shortcomings could signal a deeper crisis for competitors and smaller companies across the industry. The Asia-Pacific market was at the center of this, with LVMH brand sales in the region excluding Japan falling by 16%. China’s spending has been particularly weak this year, with numbers falling to pandemic levels despite efforts to quell the crisis with stimulus packages.
Just 18 months ago, LVMH’s strong performance after the coronavirus lockdown made CEO Bernard Arnault the world’s richest person, but this was in stark contrast to the latest news. be. By late September of this year, Arnault had fallen to fifth place on the list and his net worth had declined by $500 million, as LVMH shares fell by about 20%, according to Fortune magazine.
Changes at some of the company’s major brands, including the recent sale of Off-White and the creative shake-up at Celine, which Hedi Slimane stepped down from in early October amid difficult contract negotiations, have given rise to a strong outlook for the company’s future. Concerns are growing even more. The downturn signals a negative outlook for the industry as a whole as brands continue to navigate a largely uncertain future.
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