LVMH, the world's leading luxury group, reported that overall sales edged higher in the third quarter, although sales growth slowed. This trend has put the brakes on a long-awaited recovery in Europe’s luxury-goods industry.
The company revealed a significant slump in demand within China, with mainland sales falling by double digits last quarter. Traditionally high-spending Chinese consumers also pulled back on overseas spending. LVMH's biggest division, fashion and leather goods, saw sales fall by 5 per cent, as its key Louis Vuitton brand suffered from a boycott in China.
The report heightens concerns that the luxury industry, mired in a three-year slowdown, will struggle to regain momentum. In response to these developments, analysts have cut their target price on LVMH shares by an average of 9 per cent.