LVMH hit by growth slowdown amid fall in demand for high-end drinks

Rising inflation, growing global instability and falling demand for high-end drinks have been blamed for a slowdown in growth at the luxury goods multinational LVMH, owner of Christian Dior, Louis Vuitton and Moët & Chandon.
The group, whose brands also include Stella McCartney, Tag Heuer watches and Bulgari and Tiffany jewellery, reported revenue of €20bn (£17.25bn) between July and September – a 9% rise. That compares with a 17% increase in the previous quarter.
One of the worst hit parts of LVMH’s business was its wines and spirits division, which includes Hennessy cognac, down 14% in the quarter.
The results released on Tuesday suggest the post-pandemic boom in luxury goods, which helped LVMH become Europe’s first company to reach a $500bn valuation earlier this year, is starting to ebb.
Pauline Brown, the group’s former chair in North America, argued increasing global instability was a factor in the slowdown.
“If I was still sitting on the board at LVMH or any of the other luxury companies, what would really be rattling me is the geopolitical destabilisation around the world,” she told BBC Radio 4’s Today programme on Wednesday.
Brown added: “Luxury goods and purchases is a psychological purchase. Nobody needs a glass of champagne, nobody needs a watch or a diamond necklace … In order for you to buy it for yourself or as a gift, you really have to be in the right mood state. When we see atrocities happening … the appetite to spend on what might be perceived as frivolous goes way down.”
Referring to the fall in the wines and spirits division, she said: “About half of that business is one brand, Hennessy. There are closer to 30 brands in the wine and spirits division. The other half is primarily champagne, which actually grew – not robustly, I think by 3% in the quarter – but I think it was all on the cognac side, the drop, the negative.
“I think that [cognac] was hit hard in markets like China and North America because that aspirational consumer just isn’t spending with the same enthusiasm that the high net worth is.”
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LVMH is the first big global luxury firm to report earnings this quarter, with Hermès and Kering due to report on 24 October.

This data comes from MediaIntel.Asia's Media Intelligence and Media Monitoring Platform.