Luxury brands like Louis Vuitton have felt the pinch from the reduction in spending on luxury items in China. Jean-Jacques Guiony, the CFO, informed investors that this decline is tied to the recent instability in China’s stock market that occurred in July and August. He emphasized that significant drops in asset values, like the stock market fallout in China, naturally impact their business.
The company also noted a sluggish growth in sales within its main fashion segment, although it saw better performance in the wine and spirits sector.
China’s ongoing economic slowdown and a continuous government anti-corruption campaign have dampened luxury spending for several years. Even LVMH, the world’s biggest luxury company, hasn’t been able to completely escape the challenges presented by the Chinese market downturn.