Luxury: the slowdown is confirmed

The luxury giants had already warned investors at the beginning of the year that 2024 would not be marked by strong growth. François-Henri Pinault anticipated a decline in revenue of "about 10% in the first quarter," which was linked to difficulties encountered by his brand Gucci, which is currently undergoing restructuring. Bernard Arnault also warned that he no longer needed to see growth as strong as in the post-COVID years, during which luxury group sales showed double-digit growth rates. He had said he would be satisfied with 8 to 10%.

This first quarter has not met those figures for LVMH since Jean-Jacques Guiony, the group's CFO, announced an organic growth of 3%, whereas at the same date last year, sales had increased by 17%. It's a return to normalcy after the first half of 2023, marked by a rebound in China and very strong sales in the United States and Europe.

The year 2024, therefore, looks to be challenging, with fierce competition for market share gains. As Watches and Wonders has just concluded, the early results for LVMH in the watchmaking and jewelry segment set the tone: -2% in organic sales and -5% in reported sales. Creating products with a very attractive quality-price ratio and knowing how to leverage strengths in very high-end and iconic products will be the right strategy. This was a trend already displayed by many watch brands, which have introduced both lower entry prices and high-end, iconic limited editions and grand complications. The gap continues to widen.