Luxury conglomerate LVMH reported sales grew 9 percent in this year’s third quarter, falling by almost half from the 17-percent gain in the second quarter.
The company owns 75 brands including fashion houses Dior and Givenchy, champagne labels Moet & Chandon and Dom Perignon, jeweler Tiffany & Co., and Benefit Cosmetics.
The company’s share price fell 6 percent on the news, the Financial Times reported, bringing it a total of 25 percent below its April peak.
Kering and Richemont, LVMH’s main competitors for the wealthy’s extra dollars, posted sales off by 1.4 and 0.4 percent, respectively.
LVMH’s leather and fashion division, its largest, saw sales growth in the quarter slow to 9 percent from 21 percent in the preceding three months. Sales of alcohol slowed by 10 percent due to consumption normalizing after a post-COVID spurt, the company said.
LVMH’s sales growth in Asia, excluding Japan, plummeted by two-thirds, from 34 percent in this year’s second quarter to 11 percent in the third. Growth in Europe and the U.S. slumped into the mid-single digits, the company said.
China has been the engine that drove luxury houses to record growth from 2020 but growth has faded there as well as the country struggles with widespread economic weakness.
“Contrary to past quarters, where sluggishness in the U.S. was offset by a rebound in China, we do not see any compensating factor but rather a broad-based normalization of growth across all geographies,” HSBC analysts wrote in a note.
TRENDPOST: Much of the reduction in wealthy indulgence was in China, the place where luxury spending boomed prior to the COVID War and bounced back a bit when Beijing officially ended its zero-COVID policy on 8 January of this year.
However, as we had forecast, their three year fight of the COVID War destroyed the lives and livelihoods of hundreds of millions. Thus, given China’s myriad economic woes, it should not be surprising that the rich have scaled back their spending there.
Beyond China, we forecast luxury spending has peaked and as Dragflation sets in, even those with money will be buying less. Also, luxury spending is a bellwether. When the wealthy cut their spending, it becomes a sign to the plantation workers of Slavelandia that hard times are ahead.