The Pandemic-Fueled Luxury Shopping Craze Is Over — Retail Bum

The pandemic-fueled demand for luxury products is beginning to fade as even wealthy consumers are tightening their belts amidst a challenging economic environment.

This slowdown has wiped off $245 billion in stock value for seven of the largest luxury brands in Europe over the past six months, with LVMH alone reporting a 20% decline during the same time frame.

Last week, LVMH’s stock declined by €675, slipping to a new 2023 low in Paris after the company reported weaker-than-expected revenue growth for the quarter. Overall, its sales increased by 9% during the quarter, lower than the 17% it had reported in the previous quarter, according to Business Insider.

“Today’s news that LVMH’s revenue growth has slowed dramatically likely marks the end of a global luxury bubble,” said DataTrek cofounder Nicholas Colas on Thursday, October 12, 2023.

“LVMH is a very well-managed business, and investors have gotten used to seeing it post strong double-digit top line increases.”

A key indicator of the ongoing slowdown is that card spending on luxury products in the U.S. has now been declining for the past six quarters in a row. This trend was particularly noticeable last quarter when luxury spending was down 16% year-over-year.