Luxe Brands Hit by China Sales Slowdown

By the Editorial Team · Saturday, October 24, 2026

Shares of major European luxury brands LVMH, Kering, and Hermès have fallen to multi-year lows due to declining sales driven by weakened demand in China and ongoing restructuring challenges. This downturn has significantly reduced the wealth of industry leaders like Bernard Arnault and prompted companies like LVMH-owned Zenith to consider workforce cuts, though analysts foresee potential revenue growth by 2027.

Shares of several leading European luxury brands have experienced significant declines this year, largely due to weakened demand from Chinese consumers and challenges in executing industry restructuring plans. This trend has affected major fashion houses, including LVMH, Kering, and Hermès, with stocks falling to multi-year lows.

LVMH, the parent company of Louis Vuitton and Christian Dior, along with Kering, which owns Gucci and Bottega Veneta, and independent Hermès, all reported noticeable sales declines in the third quarter. Kering’s sales decreased by 1%, while LVMH and Hermès each saw a 2% drop. Gucci, Kering’s flagship brand, recorded a sharper 6% reduction in sales.

The slowdown coincides with broader economic difficulties in China, a crucial market for luxury goods. The Chinese economy has faced its slowest GDP growth since 2022, accompanied by rising unemployment, declining property values, and reduced household spending. These factors have dampened the appetite for high-end products among Chinese consumers and "aspirational shoppers" internationally, a key demographic for luxury brands.

Kering’s finance chief, Armelle Poulou, acknowledged the challenges during a recent earnings call, stating the company has considerable work to do in the Chinese market. Meanwhile, analysts at JP Morgan noted a substantial and unanticipated downturn within the segment of luxury goods tied to China, signaling continued pressure on the industry.

The stock performance has also impacted the wealth of LVMH’s chairman, Bernard Arnault. Once ranked as the richest person in 2024 with a net worth of $233 billion, his fortune has since fallen to approximately $117 billion, placing him 17th on the list of billionaires as of this month.

In response to the challenging environment, LVMH-owned watchmaker Zenith has initiated a consultation process that could potentially lead to workforce reductions.

Despite the current setbacks, some industry analysts remain cautiously optimistic about the sector’s outlook. Goldman Sachs Research projects that luxury goods revenues could grow by around 7% in 2027, suggesting a possible rebound as market conditions improve.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.