LVMH has lost more than $167 billion in market value this year as Chinese consumers pull back from expensive handbags, cutting group valuation by more than half from its peak above $500 billion.

The selloff exposes the conglomerate’s heavy concentration in a single division and a single region, with Asia excluding Japan generating 35 percent of Fashion and Leather Goods revenue in 2025.

Fashion and Leather Goods accounts for roughly three-quarters of recurring operating profit across LVMH’s 75 brands. UBS estimates the flagship Louis Vuitton label alone generates more than half of divisional earnings. Chinese shoppers account for nearly a third of all fashion and leather sales, leaving group performance tightly bound to domestic sentiment in mainland China.

Bernard Arnault, the 77-year-old chairman and chief executive whose family controls 65 percent of voting rights through Agache, faces a market where the pricing power of the past five years has stalled. Average luxury prices rose 54 percent between late 2019 and September 2024, according to HSBC estimates. While that strategy lifted group revenue from €54 billion in 2019 to €86 billion in 2023, shoppers in Asia are no longer absorbing further price increases for coated canvas and leather.

China’s personal luxury goods market shrank between 18 percent and 20 percent in 2024, followed by an additional decline of 3 percent to 5 percent in 2025, according to Bain estimates. Leather goods suffered the steepest drops, falling between 8 percent and 11 percent last year. Real estate weakness and employment concerns have eroded consumer confidence, while local fashion labels have gained market share by emphasizing cultural relevance.

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