With travel abroad nearly impossible, Chinese consumers who’ve driven the luxury industry’s growth are spending more at home. Pent-up spending desire during COVID-19 lockdowns earlier this year is also now being unleashed in so-called “revenge shopping”. The Louis Vuitton brand returned to growth in China in the third quarter.
Organic revenue at LVMH’s fashion and leather goods unit jumped by 12 per cent in the third quarter as the world’s largest luxury company cited strong sales of items like Christian Dior’s $3,000-and-up Bobby bags.
The upbeat report by LVMH, the first of the major European luxury players to report quarterly results, bodes well for others in the sector, said Luca Solca, an analyst at Sanford C. Bernstein.
LVMH’s divisions had sharply mixed results in the latest period, with the wines and spirits unit -- which houses Hennessy Cognac and Moet & Chandon Champagne -- also resisting better than expected. Organic revenue fell 3 per cent, less than half the decline analysts were expecting.
However, some businesses fared worse. LVMH’s selective retailing unit -- which includes DFS duty-free outlets and Sephora cosmetics store networks -- saw organic revenue slump 29 per cent amid a halt in international tourism.