Not even three years have passed since the first half of 2023, when Bernard Arnault, chairman and principal shareholder of LVMH — the world’s largest luxury goods conglomerate — topped Bloomberg’s billionaire rankings with a personal fortune of $170.8 billion. Yet by early October 2026, Arnault had fallen out of the world’s top ten wealthiest individuals, his net worth having dropped to $143 billion following a dramatic 40% plunge in LVMH’s share price since the beginning of the year.
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The luxury crash: Collapsing sales and billions in lost value
Arnault’s wealth erosion is perhaps the most striking illustration of the mounting pressures facing the global luxury goods sector. These challenges are not limited to industry giant LVMH — they are rippling across the entire sector. According to Reuters, the 10 European companies in the STOXX Europe Luxury 10 index lost approximately $350 billion in market capitalization over just 10 months. The combined market value of LVMH, Hermès, Kering, and Richemont specifically was halved between 2024 and 2026. Most tellingly, investors show no appetite whatsoever to “buy the dip.”
What has hammered luxury valuations is a string of alarming sales figures from China — a market that had served as the industry’s primary growth engine for the past decade. While companies do not break out mainland China sales specifically, their dependence on Asian demand is significant: the Asia ex-Japan region accounts for 26% of LVMH’s sales, 29% of Kering’s, and 42% of Hermès’s — and Chinese clientele also drives luxury purchases across Europe and Japan.
The latest data, however, points to a gradual but accelerating retreat of Chinese demand for Western luxury goods. Since summer, the decline has picked up pace, hitting double-digit territory, as younger affluent Chinese consumers are becoming increasingly selective — prioritizing travel, dining, and experiences over luxury purchases. This does not mean luxury house sales have collapsed entirely or ground to a halt.
Breaking it down by brand:
*LVMH, home to the world’s most iconic luxury brands, reported nine-month revenues of €57.1 billion — up 2% on an organic basis, but down 2% when accounting for currency effects. Its fashion and leather goods division (Louis Vuitton, Dior, Fendi, Celine, Loewe, Givenchy, and Loro Piana) posted a 5% organic sales decline due to China headwinds, though jewelry and watches (Tiffany & Co., Bulgari, TAG Heuer, Hublot, and Zenith) rose 6%, champagne and wines (Moët & Chandon, Dom Pérignon, Veuve Clicquot, and Hennessy) grew 3%, and Sephora cosmetics stores delivered a 6% gain.
*Kering, parent company of fashion houses Gucci, Saint Laurent, Bottega Veneta, Balenciaga, McQueen, and Brioni, as well as jewelry brands Boucheron, Pomellato, DoDo, and Qeelin, and porcelain maker Ginori 1735, reported a 1% revenue decline — driven primarily by Gucci’s ongoing difficulties. Gucci, currently undergoing a major restructuring and planning to close 125 stores this year, saw sales fall 6%.
*Even Hermès — traditionally regarded as the sector’s most resilient player thanks to its famously long waiting lists for coveted pieces — reported nine-month revenues of €4.1 billion, up 4.3% at constant exchange rates, but still falling short of analyst expectations. Performance varied by category: leather goods (Birkin and Kelly bags) surged 10.8%, while ready-to-wear and accessories slipped 2% and watches declined 6%.
How the luxury landscape is being redrawn
The situation for luxury houses deteriorated further this year after sales plummeted by 30% to 50% in Dubai — a key luxury shopping destination — from spring onward, as the regional conflict sharply reduced arrivals and footfall, according to Reuters. Things could worsen again in the coming months, as luxury brands now face the fallout from violence and looting at their stores during major protests in France. So far in Paris and Nice, four stores belonging to Burberry, Dior, and Guerlain have been ransacked, while others avoided the same fate only by installing security shutters and cutting their opening hours. The industry’s fears go beyond physical damage — the deeper concern is that wealthy tourists may cancel their Paris trips and holiday shopping during the crucial Christmas trading period, when high revenues are traditionally expected.
In reality, this year only American consumers have maintained their luxury spending at the pace seen in previous years. But when things go wrong in China, Dubai, and France simultaneously, the US market alone is not enough to prop up overall sales. And so, after several years of dominance, the prevailing belief that luxury goods are immune to any and all risk appears to be unraveling — and it is precisely this loss of faith that is dragging down valuations across the entire sector.
Originally published in Apogevmatini
