Luxury-goods industry faces challenges with inflation and high interest rates
The luxury-goods industry is experiencing difficulties as consumer spending is being squeezed due to inflation and high interest rates. LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury goods conglomerate, announced that their sales for the third quarter were below analysts’ expectations.
In the three months ending September, LVMH’s sales reached €19.96 billion ($21.09 billion), showing a 9% increase on an organic basis compared to the previous year. However, analysts had predicted sales of €20.48 billion, according to FactSet.
LVMH’s core fashion and leather-goods division accounted for €9.75 billion in total revenue, experiencing a 9% organic growth in sales. The unit that includes Sephora, called selective retailing, saw a significant revenue increase of 26%. On the other hand, perfumes and cosmetics as well as watches and jewelry had more modest growth rates, with sales up 9% and 3% respectively. The wines and spirits business unit was the only one to witness a decrease in sales, with a contraction of 14%.
