【Seoul, South】Luxury Brands Shaken by ‘Tariff Bombs’… LVMH Q1 Revenue Down 3%

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Editor’s Note

This article reports on LVMH’s first-quarter sales decline in its key fashion and leather goods division, highlighting a performance that fell short of market forecasts.

[서울=뉴시스] 14일(현지 시간) 월스트리트저널에 따르면 루이비통, 디올, 펜디, 셀린느 등 유명 명품 브랜드를 거느린 LVMH의 패션 및 가죽 제품 부문 매출은 올해 1분기 5% 감소해 101억 유로에 그쳤다. 1% 감소할 것으로 봤던 애널리스트 예상을 벗어난 수치다. 사진은 서울 시내 한 백화점 루이비통 매장 모습.
Fashion and Leather Goods Sales Down 5%… Performance Below Market Expectations

According to the Wall Street Journal on the 14th (local time), sales in the fashion and leather goods division of LVMH, which owns luxury brands such as Louis Vuitton, Dior, Fendi, and Celine, decreased by 5% in the first quarter of this year to 10.1 billion euros. This figure fell short of analyst expectations, which had predicted a 1% decline.

Wine & Spirits and Perfumes & Cosmetics Also Decline

The wine and spirits division saw a 9% decrease to 1.3 billion euros, while the perfumes and cosmetics division recorded a 1% decline to 2.178 billion euros. The watches and jewelry division remained at a similar level to the previous year at 2.482 billion euros.

Consequently, LVMH’s total revenue decreased by 3% year-on-year to 23 billion euros.

Impact of Middle-Class Consumption Slowdown and China’s Economic Downturn

LVMH’s weak performance is attributed to the recent slowdown in middle-class consumption and the impact of China’s economic deceleration. Recently, concerns over shrinking consumer sentiment and economic recession have intensified as China and the U.S., the twin engines of luxury consumption, have further escalated retaliatory tariffs against each other.

Most luxury goods are produced in France and Italy, and high-end watches are made in Switzerland. The U.S. imposes a 10% tariff on these three countries. If the mutually imposed tariffs, which have a 90-day grace period, are implemented, tariffs on these countries are expected to rise even higher.

In response, LVMH is adapting to market changes through brand innovation and cost reduction, and is considering expanding production within the United States.

Analysts Reverse Growth Forecasts, Predicting Industry Recession

Analysts had previously forecasted a revival in luxury demand as the U.S. economy grew and China’s economy showed signs of recovery this year. However, with the recent deterioration of the situation, they have completely reversed their outlook.

U.S. investment bank Bernstein broke its previous forecast of 5% growth for the luxury industry this year and now predicts a 2% decline in revenue.

“The crisis in the luxury industry is the result of a combination of factors including wealth destruction, reduced purchasing power of U.S. consumers, and deteriorating consumer sentiment,” pointed out Erwan Rambourg, Managing Director of global financial group HSBC.
He added, “We literally expect fewer champagne bottles to be popped this year,” forecasting an industry recession.
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⏰ Published on: May 19, 2025