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The Party May Be Over, but LVMH Has Moves to Make

This week, softening sales growth at the French giant was the latest sign that the post-pandemic luxury boom is over, but chairman Bernard Arnault may be able to play the weak market to his advantage.
This week, LVMH reported softening sales growth, sending luxury shares tumbling, but chairman Bernard Arnault may be able to play a weak market to his advantage.
This week, LVMH reported softening sales growth, sending luxury shares tumbling, but chairman Bernard Arnault may be able to play a weak market to his advantage. (Getty Images)

This week, sector bellwether LVMH reported softening sales growth, the latest sign that the luxury goods boom is over as shoppers sober up from post-Covid, YOLO (“you only live once”)-fuelled euphoria, and inflation and high interest rates weigh heavily on discretionary spending.

Sales at LVMH’s critical fashion and leather goods division, which includes key megabrands Louis Vuitton and Dior, grew just 9 percent in Q3, missing estimates by over two percentage points. The result was sharply down from the 21 percent jump the unit generated in the previous quarter and a far cry from the heady days of record revenue growth as the division roared out of the pandemic.

The news sent LVMH shares tumbling to their lowest level since the start of the year and dragged down stock prices at rival luxury players including Richemont, Kering and Burberry.

But a closer look at the results suggests that LVMH chairman Bernard Arnault has a few moves up his sleeve and may be able to play the sales miss to his advantage. Here are a few takeaways from the French giant’s latest disclosure:


1. Luxury’s Party in the USA Is Over

Nowhere has the softness been more pronounced than in the US, where pandemic-era stimulus checks contributed to a major surge in luxury spending from aspirational consumers.

With China mired in slow growth, the US market has been critical to luxury sales momentum in recent years. Some luxury players, particularly Kering, moved to tap surging demand with a deeper push into the US, including new stores in second-tier cities, particularly in the American South.

But demand has since dried up and LVMH’s latest results offered no sign that US sales, which grew just 2 percent in Q3, were on the mend, raising the spectre of empty stores from Austin to Nashville.

2. Loewe, Celine: Mega-Labels in the Making

Despite a poor Q3, LVMH clearly has moves up its sleeve, however. For a group whose key fashion and leather goods portfolio has long been dependent on Louis Vuitton and Dior, the latest results revealed just how far the company has come in turning some of its smaller projects into multi-billion-dollar businesses, notably Hedi Slimane’s Celine reboot and Jonathan Anderson’s reinvention of Loewe.

LVMH doesn’t break out figures for its brands, but market sources suggest Slimane’s Celine now generates more than €2.5 billion in annual revenue, while Anderson’s Loewe is close to crossing the €2 billion mark. Tellingly, management called out Celine and Loewe, as well as long-standing powerhouses Louis Vuitton and Dior, for their “strong performance” in a call with analysts following the results.

The industry is currently swirling with speculation on a new round of designer musical chairs, including what star ex-Gucci designer Alessandro Michele might do next. With the right creative configuration and level of marketing spend, could LVMH leverage its deep pockets to out-muscle competitors weakened by the challenging market and re-energize Givenchy or Fendi, thereby adding to its stable of mega-brands?


3. A Silver Lining: M&A Opportunities

Of course, future growth drivers could also come from M&A. And while the latest drop in LVMH’s share price isn’t exactly great news for Arnault’s net worth, the sector-wide depression in stock prices could open up compelling opportunities for M&A for the cash-rich group, with key targets cheaper than ever.

Richemont’s Cartier, for one, has long been on Arnault’s wishlist and likely remains so, despite his $16-billion takeover of the US jeweller Tiffany, which lacks Cartier’s true luxury credentials. Could this be the time to make a play? Of course, Britain’s Burberry, without a controlling shareholder, is technically for sale every day of the week. And the Prada family may be tempted to sell. Stay tuned.



Man wearing Birkenstock sandals in hammock.
Birkenstock raised $1.5 billion in its public debut. (Birkenstock)

Birkenstock raises $1.5 billion in IPO. In a fourth big test of the US IPO market in a month, the German company and L Catterton sold about 32 million shares on Tuesday for $46 each after marketing them for $44 to $49, according to a statement. At the IPO price, Birkenstock had a market value of $8.64 billion based on its filings with the US Securities and Exchange Commission.

Fast Retailing reports record $3 billion in annual profit. Japan’s Fast Retailing, owner of clothing brand Uniqlo, reported on Thursday that full-year operating profit rose 28 percent to reach its second consecutive record, aided by a post-pandemic recovery in China and the yen’s slide. sinks to record low as Wall Street brokers turn bearish. Inc. slumped to a record low in Hong Kong, after a slew of Wall Street brokerages cut the outlook for the e-commerce retailer on concerns that China’s consumption growth will remain sluggish.


Showfields files for bankruptcy. The multi-brand specialty retailer on Friday filed for Chapter 11 bankruptcy, following a continued decline in sales post-pandemic that left it unable to pay back mounting debt.

Warm weather knocks over £500 million off M&S and Next. High street bellwether Next Plc. and middle-class favourite Marks & Spencer Group Plc. saw their share prices tumble, knocking more than £500 million ($610 million) off the companies’ market capitalisations as analysts voiced concern over the impact of unseasonably warm weather.

Fashion Trust Arabia Awards postponed amid Middle East conflict. The event was due to take place in Doha, Qatar on Oct. 25. A new date for the event has not been scheduled, though Fashion Trust Arabia plans to announce its 2023 award winners before the end of the year.

Luca Magliano is the next guest designer at Pitti Immagine Uomo. Luca Magliano is the next guest designer to show at Pitti Immagine Uomo, and will stage a special event during the Florence trade show next January. Magliano founded his namesake menswear brand in 2017, and was awarded the LVMH Karl Lagerfeld prize earlier this year.

As US holiday season nears, retailer imports return to pre-pandemic levels. After a spending spree on goods that began during early COVID-19 lockdowns in 2020, US consumer patterns are normalising. US ocean container import growth over the first nine months of this year, which is dominated by retailers, was within 2.5 percent of the same period in 2019, Descartes Systems Group said in a report on Tuesday.

EU ‘very close’ to finalising Russian diamond ban, says Belgian prime minister. In a move that will cut off another vital source of revenue for Vladimir Putin in his war against Ukraine, Alexander de Croo said a year-long attempt by the European Union and G7 countries to reliably trace diamonds coming from Russia was almost complete, with an aim for it to come into effect by Jan. 1, 2024.

UAE’s Adia to buy stake in Ambani’s retail unit for $597 million. The latest investment from Abu Dhabi Investment Authority comes after global investment firm KKR invested an additional $250 million and Qatar Investment Authority acquired a $1 billion stake in Reliance Retail Ventures.

Gucci Cosmos Exhibition arrives in London. Located at 180 Studios on the Strand, the display, which first debuted in Shanghai in April, blends experiential elements with displays of items from the house’s archive to chart the history of the Italian brand and demonstrate how its codes have been re-interpreted by creative directors over the years.

Clothing stocks seen as latest winners from weight-loss drugs. Slimmer people will likely need to purchase smaller sizes and will be motivated to exercise more to keep the weight off, Deutsche Bank AG analyst Adam Cochrane wrote in a note. He identified sports wear makers Adidas AG and Puma AG as potential beneficiaries.


Olaplex is known as the prestige hair category creator.
Supergoop CEO Amanda Baldwin will replace Olaplex CEO JuE Wong when she departs the brand next year. (Olaplex)

Olaplex CEO JuE Wong to step down. She’ll be replaced next year by former Supergoop CEO Amanda Baldwin. The executive reshuffle comes as sales have slumped at the haircare brand.

Tracee Ellis Ross’ Pattern Beauty taps Christiane Pendarvis as co-CEO. The hair care and styling range founded by Tracee Ellis Ross, has appointed Christiane Pendarvis as co-CEO. Pendarvis comes to the business from Savage X Fenty, where she was co-president.


Chloé has named Chemena Kamali its new creative director.
Chloé has named Chemena Kamali its new creative director. (Chloé)

Chloé confirms Chemena Kamali as creative director. As previously reported in BoF, the Richemont-owned label had tapped Kamali to lead a parallel studio at Chloé as it prepared for the departure of former creative director Gabriela Hearst, who staged her last show for the brand on Sept. 28 at Paris Fashion Week.

Shaquille O’Neal named president of basketball at Reebok. As the leader of the brand’s return to making performance basketball footwear, O’Neal will be tasked with leading “the brand’s basketball category strategy and cultivating partnerships with athletes and organisations in the brand’s quest to return to its position as a dominant force in the sport,” the release said.

Hugh Devlin, key London fashion lawyer, has died. Devlin spearheaded his law firm, Withersworldwide’s creative industries practice, helping broker key deals across the luxury fashion, beauty and design sectors over his 30-year career.


An image shows a person taking a picture of clothing hanging in their closet.
Peer-to-peer rental platform Pickle raised $8 million. (Shutterstock)

Peer-to-peer fashion rental player Pickle raises $8 million. The New York-based company said in a blog post that its next steps include improving search, product variety and other aspects of its user experience; expanding its capabilities in markets where it sees growing demand, such as Los Angeles and Miami; and opening a brick-and-mortar store.

Compiled by Diana Pearl.

Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.

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