China’s economic slowdown and a crackdown by Beijing on displays of wealth are taking a toll on some of the world’s top luxury brands.
LVMH says its sales in Asia, which include China but not Japan, fell by 14% in the three months to the end of June, worsening from a 6% decline in the first quarter.
The Paris-based firm is not alone, as many of its competitors are also seeing sales slow in the world’s second largest economy.
It comes as Chinese shoppers cut back on expensive purchases and government censors shut down social media accounts of influencers who have shown off their luxury goods online.
LVMH, which is the world’s largest luxury group, also said its overall revenue growth had slowed to 1% for the period.
Still, the group’s chairman and chief executive Bernard Arnault remained cautiously optimistic.
“The results for the first half of the year reflect LVMH’s remarkable resilience… in a climate of economic and geopolitical uncertainty.”
“While remaining vigilant in the current context, the Group approaches the second half of the year with confidence,” he told investors.
Shares in the the company – home to 75 high-end brands including Louis Vuitton, Dior and Tiffany & Co – have fallen by almost 20% over the last year.
LVMH is not the only big name feeling a slowdown of luxury goods sales in China.
In its latest financial figures, upmarket British fashion label Burberry said its sales in mainland China had fallen by more than 20%, compared to a year earlier.
Swatch Group – the Swiss watchmaker which owns Blancpain, Longines and Omega – said weak demand in China helped push down its sales by 14.4% for the first six months of 2024, compared to the same time the previous year.
Richemont, which owns Cartier, saw sales in China, Hong Kong and Macau, fall 27% year-on-year in the quarter ending on 30 June.
And German fashion giant, Hugo Boss, downgraded its sales forecasts for the year on concerns about weak consumer demand in markets like China and the UK.
Other major luxury goods industry players, including Hermes and Gucci-owner Kering, are due to report their latest financial results this week.
Recent data out of China suggest the economy is still struggling to recover from the pandemic downturn, as both second quarter growth and June retail sales figures came in below expectations.
Flaunting luxury brands online has also come under the scrutiny of Chinese authorities.
In May, state-controlled newspaper Global Times reported that an internet celebrity called Wanghongquanxing was banned from social media “amid a crackdown on online wealth show-offs.”
His account on Douyin, China’s equivalent of TikTok, had more than four million followers.
Several other popular influencers have also seen their accounts deleted in a campaign that China’s internet watchdog has said was aimed at banning “vulgar” and deliberately ostentatious content.
Additional reporting by Fan Wang