LVMH’s deputy chief executive officer said Chinese customers have been pulling back on travel and consumer spending, indicating that a slump in demand for luxury goods may still have some way to run.
“For the past three months, Chinese tourists have been traveling less and buying less,” when out of the country, Stephane Bianchi told French lawmakers in a hearing on Wednesday.
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.
Bianchi said it’s unclear when US demand will recover in light of ongoing tariff uncertainty. The luxury leader will no longer increase prices in its wines and spirits division, he said, adding, “we cannot increase prices indefinitely.”
Shares of LVMH, which are down more than 20% this year, rose as much as 2.9% in early trading in Paris on Thursday amid a wider market rally triggered by a US court blocking President Donald Trump’s tariff strategy.