【China】LV’s ‘Big Ship’ Struggles to Carry LVMH: Declining Performance, Privacy ‘Leaks’, Luxury Giant May Sail into Era of Value-for-Money

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Editor’s Note

LVMH’s latest results signal a challenging period for the luxury sector, marked by declining sales and emerging operational concerns.

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LVMH Reports Revenue and Profit Decline in H1 2025

LVMH Group’s financial report for the first half of 2025 shows a decline in both revenue and profit. The ‘Fashion & Leather Goods’ division, which includes brands like LV and Dior, performed the worst, with organic revenue dropping by 7%. Concurrently, brands such as LV and Dior are facing issues of customer data breaches, casting a shadow over brand development. Luxury industry experts point out that the luxury market is entering a downturn phase and moving into an era of value-for-money, necessitating brands to upgrade their service models with a focus on customer value.

Core Division Sees Two Consecutive Quarters of Negative Growth

On the evening of July 24, LVMH Group, one of the world’s top three luxury conglomerates, released its H1 2025 financial report. The report indicates that the group’s total revenue and profit both declined. Total revenue fell by 4% year-on-year to 39.81 billion euros; recurring operating profit dropped by 15% to 9.01 billion euros, while net profit decreased by 22% to 5.69 billion euros.
The ‘Fashion & Leather Goods’ division, which serves as the performance pillar for LVMH Group, accounting for about half of its business, performed the worst. This division, containing brands like LV and Dior, saw its organic revenue decline by 7% in the first half of this year, with a 9% year-on-year drop in the second quarter alone.

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Data Breaches Add to Brand Challenges

Boosting sales has become an urgent need for top luxury brands. However, over the past three months, Dior and LV have successively experienced customer data breach ‘incidents’, further clouding brand development.

“This has already created a crisis for the entire luxury industry. Customers are beginning to distrust brands. Data thieves are becoming more brazen, which could have a significant adverse impact on brands like LV,” said luxury industry expert Zhou Ting to the Daily Economic News reporter. She pointed out that the luxury sector is collectively entering a downturn phase, with the industry moving into an era of value-for-money, making it difficult to sustain high profits.
Industry Expert: Luxury Sector Enters ‘Value-for-Money Era’

To boost sales and attract potential customers, top luxury brands are also pulling out all the stops. This year, LV’s ‘big ship’ in Shanghai, the ‘Louis Vuitton Voyager’, frequently trended on social media, with its ‘boarding passes (visit tickets)’ and ‘dining’ experiences being highly sought after. LVMH Group also mentioned the ‘Voyager’ in its latest financial report, stating that LV continues to demonstrate creativity by constantly reinventing its iconic products and unique brand experiences. The ‘Voyager’ embodies the ‘spirit of travel’ that LV has adhered to since its founding in 1854.

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However, just as LV was attracting customers with grand events, news emerged (on July 19) that it was being investigated by Hong Kong’s Privacy Commissioner for Personal Data for allegedly leaking information of approximately 420,000 luxury buyers. Its ‘sister’ brand Dior also admitted to a ‘leak of Chinese customer information’ in May this year. This undoubtedly serves as a wake-up call for luxury brands eager to boost sales: how to find a balance between increasing sales and protecting user privacy?

“Boosting sales and protecting customer privacy are not contradictory. Only by having the capability to protect customer privacy can a brand better understand its customers, gain their trust, and thus achieve better sales and service,” Zhou Ting told the Daily Economic News reporter bluntly. She stated that the current customer privacy breach incidents have already created a crisis for the entire luxury industry. “On one hand, customers are beginning to completely distrust luxury brands, trying to avoid sharing relevant information with them. On the other hand, data thieves are becoming more brazen. Luxury brands’ customer data has become a high-value target that is very easy to steal.”

The overall luxury industry is facing systemic risks. Zhou Ting believes that brand value-for-money will gradually give way to product value-for-money and service value-for-money.

“The industry is entering an era of value-for-money. It will become increasingly difficult for luxury goods to maintain high profits. Entering a downturn phase is inevitable,” she said.
Future Direction: Upgrading from Sales Model to Service Model
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Nevertheless, China remains a core global luxury market. According to the latest data from the Key Account Research Institute, in the first two quarters of 2025, the Chinese luxury market contributed a total of 517 billion yuan in sales and drove approximately 5 trillion yuan in related high-end consumption industries to achieve counter-cyclical growth. Notably, in 2024, 278 monitored luxury brands opened about 350 new stores in China, while 89 brands completed renovation and upgrades for a total of 430 stores.

“If luxury brands want to regain growth, they must upgrade from a sales model to a service model, with customer value at the core. They need to manage customers and provide them with one-stop lifestyle services based on trust. Only then will they seize opportunities and have a future,” Zhou Ting stated. She added that luxury brands continuously opening large flagship stores, experience stores, and focusing on online channels to improve operational efficiency and customer experience will become the future direction for many brands.
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⏰ Published on: July 25, 2025