The mood in the fashion industry is brightening, even if only slightly. The French luxury group LVMH, the largest in the world and a long-standing industry leader, has presented a cautiously optimistic report for the third quarter. This suggests that the long-awaited recovery in global luxury spending may finally be taking shape.
After several challenging quarters, the group, whose portfolio includes brands such as Louis Vuitton, Dior, Celine and Loewe, reported a decline in sales of just two percent in its key fashion and leather goods division in the three months to September. Although this is modest, it represents a significant slowdown from the nine percent decline in the previous quarter.
Shares in LVMH rose 14 percent on Wednesday, the Financial Times reported. The increase was fueled not only by improving sales figures, but also by news of Maria Grazia Chiuri’s appointment as Fendi’s creative director. This move brought renewed optimism across the luxury sector.
For Bernard Arnault’s empire, the first signs of a turnaround are less due to price increases. Rather, they are based on a renewed interest in buying among consumers, especially in China. There, consumers are returning to the boutiques after a long lull. Analysts note that the group’s gains are mainly due to volume and not to further price markups. This is a welcome change in a market tired of incessant price increases.
However, a significant upturn is unlikely to fully materialize until the second quarter of 2026. By then, the new creative directors’ collections must have had time to arrive on the sales floor. Dior in particular has high hopes for selling shoes, bags and jewelry. This is true even though Jonathan Anderson’s fashion vision continues to divide opinions among critics and audiences.
New designers contribute to recovery
The appointment of new creative directors at LVMH has created a level of expectation rarely seen since the post-pandemic boom. The moves from Anderson to Dior and Chiuri to Fendi, Michael Rider’s debut at Celine and the arrival of the founders of Proenza Schouler at Loewe signal an internal renewal. This aims to regain what fashion once did best: arouse desire.
Still, no one is predicting a return to the hustle and bustle of 2021. The next upsurge in luxury is likely to be more subtle and based more on perceptions of value and creative credibility. As one analyst noted, even the very rich don’t like feeling like they’re paying too much.
If so, LVMH appears to be well positioned. With its portfolio heavily focused on accessories, the group could be ready to catch up. Between 2022 and 2025, the ‘soft’ luxury categories lagged behind jewelry’s four percent annual growth, according to research from RBC. A realignment could benefit brands such as Vuitton, Celine and Loewe, although opportunities also lie in the group’s watch and jewelry divisions.
For now, the numbers point to resilience rather than triumph. But in an industry where perception is everything, that might be enough. When the most valuable luxury group in the world starts moving, the rest of the industry often follows. All eyes now turn to Kering’s third-quarter results, due on October 22, and the performance of its flagship brand Gucci.
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