Slowing growth for LVMH, the world’s most valuable luxury conglomerate, saw traders wipe almost 10% off the value of its shares this week, triggering a broader sell-off for hard luxury goods.
LVMH shares dropped from €734 to €681 on Wednesday after the French group’s third quarter performance disappointed markets.
Organic revenue growth dropped from 17% for the first half of 2023 to 9% in Q3.
Sales of its watches and jewelry rose by an even more anaemic 3% in the quarter, having grown by 13% in the first six months of the year.
LVMH watch and jewelry brands include Bulgari, TAG Heuer, Tiffany & Co., Chaumet, Hublot and Zenith.
Growth has been slowing across mature Western markets since post-pandemic money printing went into reverse along with interest rate rises designed to snuff out rampant inflation.
Brands have been hoping China would compensate after it finally eased covid travel bans last year.
Sales of luxury goods in Hong Kong and Macau have been growing strongly, but mainland China has not bounced back nearly as strongly as other markets.
Figures from Chow Tai Fook Jewellery Group Limited, which is listed on the Hong Kong Stock Exchange, show the contrasting fortunes of mainland China, Macau and Hong Kong.
Sales rose by 5.8%, year-on-year, for the quarter ended September 30, but same store sales declined by 12.1% in mainland China at the same time Hong Kong and Macau grew by 55.7%.
Mainland China is by far the larger market for the jewelry group, with 7,458 points of sale compared to 86 in Hong Kong and Macau.
Swiss watch exports to China rose by 9.3% for the first eight months of 2023, but by 26.1% to Hong Kong.