Key facts
- European luxury firms have lost approximately $350 billion in market value this year.
- LVMH reported a larger-than-expected third-quarter sales miss.
- The decline is linked to persistent weakness in China's economy.
- The top 10 European luxury firms on the STOXX Europe Luxury 10 index have lost around $350 billion in market capitalization.
- LVMH shares have fallen over 40% this year.
European luxury companies have experienced a significant downturn, with their combined market capitalization shedding approximately $350 billion this year. This decline is largely attributed to persistent economic headwinds in China, a crucial market for luxury goods, and a disappointing third-quarter sales performance from French fashion giant LVMH.
The STOXX Europe Luxury 10 index, which tracks the top 10 European luxury firms, has seen its constituents lose around $350 billion in market value since the beginning of the year. LVMH, a major player in the sector, reported a larger-than-expected miss in sales for its key fashion and leather goods business, further dampening hopes for a sector-wide rebound.
LVMH's shares have fallen over 40% this year, underperforming its luxury peers. The company, which owns brands like Louis Vuitton, Dior, Tiffany, and Bulgari, has seen its market performance impacted by the broader sector slowdown. The wealth of its CEO and owner, Bernard Arnault, has also been affected, according to Forbes wealth tracking data.
While the overall trend is negative, some companies have shown resilience. Richemont, which focuses more on watches and jewelry, has managed to buck the wider market trend. However, the broader European luxury sector, including giants like LVMH, Hermes, Gucci owner Kering, and Richemont, has seen its combined market capitalization nearly halve since around 2024.