The recent news of LVMH, the giant fashion conglomerate that owns Louis Vuitton, Christian Dior, Fendi, Celine and many others, has posted a decline of 7% shares recently. There are an extensive number of YouTubers and commentaries suggesting that the alleged price increases and quality decline could possibly be a factor.
However, Reuters reported that the drop was in lieu of an unexpected fall in third-quarter sales and warning of an uncertain economic and geopolitical environment. Revenues fell 3% to €19.1bn due to weak Chinese consumer spending. The fashion and leather goods division saw a 5% decline. Shares of Kering, Dior, and Hermes also fell.
Le Monde states, Since August, Louis Vuitton’s subcontractors faced a drastic reduction in production hours, down to 350,000–390,000 for 2024 from 400,000–450,000 initially forecast. Sales of handbags and leather goods are stalling.
LVMH shares dropping
YouTuber Super Dacob claims that the luxury market’s current downturn is worse than during the 2008 crisis. He alleges that if brands keep doubling their prices while allegedly lowering quality, customers will be dissatisfied.
Bloomberg made an entire video stating that some of these luxury designers are producing their materials, specifically delicate embroideries, in India. Cheap labor and highly skilled individuals are easily found in countries like China, Vietnam and India. There are questions asking why some of these luxury brands are hesitant to mention that some of their items are made in India.
However, it is unclear if any LVMH owned companies are producing or purchasing materials produced in India.
This alleged quality decline within Louis Vuitton in itself is not a new topic of discussion. Redditors have discussed the ordeal among each other in the last few years with regards to the problems they’re facing with their new purchases.
Speculation surrounds the entire industry. Some believe that even the strongest brands may soon need designer outlet stores. Others view this as a temporary setback. Only time will tell if these giants of luxury will make a comeback.
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