Luxury giants lose their luster as Chinese shoppers keep skipping splurges

Red is the new black… High-end retailers have lost billions in market value as Chinese consumers continue to skip out on Dior saddle bags. LVMH — which owns Dior, Louis Vuitton, Fendi, and 70+ other luxury brands — said its sales fell 3% last quarter. The luxe legend’s revenue fell 16% in Asia, dragged down by China, where LVMH said consumer confidence has hit lows not seen since the pandemic. Ferragamo’s also struggling to sell its fancy loafers in Beijing: the Italian fashion house this week reported that sales in the Asia Pacific region — which make up about a third of its total revenue — plunged 20%.

• BOGO: Companies including Gucci owner Kering, Burberry, Hugo Boss, and Cartier owner Richemont have warned investors about shrinking sales in China. Prada’s been an outlier, with revenue boosted by its more affordable Miu Miu brand.

Off the rack… The luxury slowdown is a symptom of weak spending in China, which has been struggling to revive its economy. The world’s second-largest economy is expected to report today that its third-quarter GDP grew at the slowest pace since 2022. The country’s in its longest period of deflation in decades as companies cut prices to drum up demand. While a broad decline in prices may sound good, it’s dangerous for economies. Companies might earn less money, leading them to scale back production and lay off workers, leaving consumers with even less money to spend… and so on.