Luxury Goods Group LVMH Remark Declining Sales due to Slowdown in China

Published By : 14 Oct 2015 | Published By : QYRESEARCH

LVMH is the first large luxury goods provider to allege collapse of the China stock market over the summer has impacted sales, especially at the group’s flagship store that merchandises Louis Vuitton brand.

LVMH, which is the biggest luxury group in the world owns above 70 brands that include the jeweler Bulgari and fashion labels such as Celine and Fendi, stated that the drop in spending growth rates has been observed by Chinese buyers more abroad than at home. 

As stated by the Chief Financial Officer of the company at an investor conference call regarding the third quarter sales, that the collapse of the Chinese stock market has been impacted adversely and that the company anticipates the impact to last only for a few months.

The company CFO further commented that, although Chinese tourists are seen in large numbers abroad, they are not spending as much, hence the growth rate is less than what it was in the first half.

In the beginning of the week, LVMH stock dropped above 3% after the Paris-based luxury goods company commented that comparable sales growth at the major leather and fashion goods division had dropped more than what analysts expected to be 3% in the third quarter. This is a drop of 10% as compared to the previous three months.

In the LVMH group, it is Louis Vuitton that accounts for the majority of the sales and profits of the division, and the CFO further commented that it is not very far for the brand’s growth to be as much as the whole division during the period.

Chinese consumers, known as the biggest luxury buyers in the world have been increasingly shopping overseas in order to save money. But a recently carried out survey on retailers does not seem for revenue to be affected due to the stock market collapse

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