You have read before here from Your Survival Guy that luxury companies have become dependent on the Chinese consumer. It appears now that the Chinese economy is sick, and the luxury sector may contract the flu. Stephane Bianchi, LVMH’s deputy chief executive officer, recently told French lawmakers in a hearing that “For the past three months, Chinese tourists have been traveling less and buying less.” Bloomberg’s Angelina Rascouet reports:
The comments come after Bloomberg reported last week that the luxury leader has been warning of softening demand. In the first quarter, LVMH’s revenue in the region that includes China fell 11% on an organic basis. The company recorded a similar drop for all of 2024.
LVMH has also noticed Chinese consumers taking a greater interest in local brands, Bianchi said. Without naming specific labels, he said some Chinese jewelry companies have seen an explosion in demand.
As shown in the chart below, Young Research’s Luxury Goods Index has declined 18% since its peak in February 2025. During that same time, the S&P 500 is only down around 4%.
Action Line: Will the Chinese economy collapse, taking the luxury goods industry with it? Click here to subscribe to my free monthly Survive & Thrive letter to follow along.
