LVMH’s market capitalization has fallen by €131.6 billion. Across major luxury companies, the China market crisis has erased €251 billion in value.
China drove luxury-sector growth for more than a decade, but demand has slowed. Over the past six months, monthly retail sales growth averaged less than 0.5%.
The slowdown is compounded by falling Chinese stock markets and a new 20% tax on dividends and interest from offshore trusts, which is affecting luxury brands’ wealthy clientele.
With few signs of an immediate recovery, luxury companies such as LVMH are reportedly focusing on operational efficiency while they wait for consumer demand to rebound.