The Gucci store on Fifth Avenue, in New York, March 20, 2024. MICHAEL M. SANTIAGO/GETTY IMAGES VIA AFP The luxury sector has a hangover. After years of crazy growth in China, particularly in 2022 and 2023, manufacturers of handbags, scarves and perfumes are facing a drop in sales in the third quarter. The country was the El Dorado of Louis Vuitton, Gucci and Lancôme. Obviously, he is no longer so. With the exception of Hermès, all luxury players are struggling. At LVMH, within the fashion and leather goods division, which includes Louis Vuitton, Dior and Celine, sales of ready-to-wear and bags fell by 5% in three months, between July and the end of September, compared to the same period in 2023. Kering suffers a much more pronounced decline. The group owned by François Pinault’s family lost 15% in quarterly turnover, compared to the same period in 2023. In bad shape for several years, Gucci, its biggest brand, is down 26%. Saint Laurent, for its part, fell 13%. And the Chinese slowdown explains, to a large extent, these plunges. The cosmetics market is not spared. L’Oréal is struggling to sell its perfumes, skincare products and lipsticks, these little fragments of luxury that some consumers treat themselves to because they cannot buy a handbag considered too expensive. The French giant’s sales fell by 6.5% in the third quarter, in North Asia, due to the situation in China, where the evolution of turnover has only worsened over the course of 2024: slight increase in the first quarter, fall in the second, dip in the third. Over this period, “the only segment to progress is that of mass market products”, says Nicolas Hieronimus, general director of L’Oréal, probably because fans of high-end skincare and makeup such as Lancôme or Armani have switched their purchases on less expensive products at Maybelline or L’Oréal Paris. Its American competitors Coty and Estée Lauder are also struggling. Chinese shopping centers are emptying Eyewear manufacturers also deplore the change in consumer behavior. In the third quarter of 2024, the Franco-Italian group EssilorLuxottica suffered a 4% drop in activity. The Ray-Ban manufacturer’s turnover is slowing in China. Because Chinese shopping centers are emptying. On the island of Hainan, duty-free territory where Gucci, Cartier and Chanel have taken over, tourists from the continent are still there. But, few people buy. The conversion rate, the ratio between attendance and purchase, is low in beauty product stores “like in all the others”, reported Mr. Hieronimus, Tuesday October 22. According to local authorities, during the week of October 1 – Golden Week, seven public holidays in China – sales fell by almost 40% on the island of Hainan. You have 58.31% of this article left to read. The rest is reserved for subscribers.
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