LVMH fashion sales decline as CEO expresses cautious optimism amid ongoing luxury slowdown
LVMH has reported a 15% decline in profits for the first half of 2025 to €9.01 billion (£7.8 billion), amid a decline in sales across its flagship fashion and leather goods division.
The trading update underscored ongoing weakness in global demand for luxury goods, following a period of aggressive price increases and growing geopolitical and economic uncertainty.
The owner of Louis Vuitton, Givenchy and Dior saw a 4% drop in revenue to €39.8 billion (£34.7 billion), down from €20.7 billion (£18 billion) in 2024, with the fashion and leather goods business posting revenue and profit declines in the first half.
Revenue for the division fell 7% to €19.1 billion (£16.6 billion), driven by softer demand as affluent consumers cut back on spending, compounded by a tough comparison with the previous year, when tourist spending - particularly in Japan - had been stronger.
Elsewhere in the group, revenue from watches and jewellery and perfumes and cosmetics remained flat, while the selective retailing - including Sephora - delivered growth in both revenue and profit.
Against a particularly high basis of comparison, the global beauty retailer continued to achieve revenue growth, drawing on its robust strategy and consolidating its global leadership position.
Looking ahead, LVMH acknowledged the ongoing geopolitical and economic uncertainty, as CEO Bernard Arnault noted that the luxury group is entering the second half of the year "with great vigilance", but remains "confident".
"LVMH showed solidity in the current context. We owe this to the power of our iconic brands and their boundless capacity for innovation while remaining true to their culture of incomparable artisanal craftsmanship," Arnault said in a statement.
"Beyond the prevailing uncertainties, we remain focused thanks to the long-term vision that has always guided our family group. We are driven by our steadfast pursuit of quality and desirability in everything we create, combined with the modernity of our historic brands.
"I am confident in LVMH’s tremendous long-term potential and the commitment of our teams to further reinforce the group’s leadership position in luxury goods. Our main shared priority is about offering our customers the most exceptional products."
Industry commentator Marcus Jaye told TheIndustry.fashion: "LVMH’s results are a reflection of a luxury industry in turmoil. It says something about how big they have become. Growth at its level was never sustainable given the size of the brands and the business.
"They are now in a perfect storm, somewhat of their own marking. They have alienated many customers with huge price increases while the quality for most brands doesn’t warrant the high prices. Add in controversies around the supply chain and the continually rebranding and change in creative visions, many of the fashion brands at LVMH have become confusing or tainted. It became a group too reliant on brand names and hype to sell product.
"Innovative design and quality is the foundation of luxury and they should return to that. But, unfortunately for them, that means becoming smaller, both in terms of production and profit margins.
The news follows Jonathan Anderson’s appointment to lead the entire design direction at Dior, marking a bold new chapter for the LVMH-owned Parisian house. Unveiling his debut collection for Dior Homme last month in Paris, Anderson delivered a show that exceeded expectations - thrilling both longtime fans of the designer and loyal followers of the brand. There is growing hope that his vision could mark a turning point for LVMH, breathing new life into its fashion division through Dior.
Commenting on this, Yanmei Tang, analyst at Third Bridge, said: "Dior stands at a peculiar moment within the luxury landscape as the industry faces a structural crisis driven by consumer fatigue and a perceived lack of creativity. Our experts say there is no longer the same level of desire for many products across the market, pushing all major brands to change creative direction in search of relevance. Dior is no different, with both its men’s and women’s divisions under new creative leadership.
"Tariff pressures are likely to push Dior prices up by five to ten percent in the United States, but our experts note that the brand is positioned to offset this impact by leveraging American tourist spending in Europe.
"Our experts say Dior under JW Anderson is moving away from flashy marketing and celebrity hype, focusing instead on making the brand culturally relevant. In the past, Dior relied on big events and slogans to drive growth, but Anderson plans to build real substance into products that connect with today’s customers who want authenticity, not just logos."
