LVMH faces challenges as the Chinese luxury shift hits revenues
LVMH, the owner of numerous luxury brands, is experiencing revenue declines in China. It warns that Chinese consumers are travelling less and tightening their spending abroad. Their attention is increasingly turning to local brands with luxury aspirations.
Stéphane Bianchi, deputy CEO of LVMH, warned that Chinese customers are pulling back from travel and consumer spending due to signs of waning demand for luxury goods. She pointed out that in the last three months, Chinese tourists have been traveling abroad less frequently and spending less during their trips.
In the first quarter, the revenues of LVMH, a conglomerate owning 75 luxury brands such as Louis Vuitton, Christian Dior, Givenchy, Bvlgari, Fendi, Tiffany & Co., and Moët & Chandon, dropped by 11% in China. The company noted a similar decline throughout 2024.
Chinese have an appetite for "local luxury"
The deputy head of LVMH also noted that Chinese consumers are more interested in local brands. Without mentioning specific brands, he pointed out that some Chinese jewellery companies have experienced a dramatic increase in demand.
Quoted by Bloomberg, Bianchi said that it is unclear when demand in the United States will rise in light of ongoing tariff uncertainty. He added that the conglomerate will no longer be raising prices in the part of the business covering wines and spirits, stating that "we cannot raise prices indefinitely."
