Market capitalisation of LVMH has fallen to roughly €213 billion, down from more than $500 billion at the height of the pandemic-era luxury boom, when it briefly stood as Europe’s most valuable company.
The group still generated €80.8 billion in revenue and €17.8 billion in recurring operating profit during 2025, and first-half 2026 revenue reached €38.6 billion with organic growth of 2 per cent. Fashion and leather goods told a weaker story, with first-half sales down 5 per cent and recurring profit down 7 per cent.
The Boom Lost Its Buyers
The problem lies partly beyond LVMH itself. Luxury prices have risen by roughly 50 to 70 per cent since 2019, while an estimated 60 million aspirational consumers have withdrawn from the market altogether.
Inflation did not merely make ordinary goods more expensive; luxury itself pulled away from the customers who once stretched their incomes to buy it.
That retreat traces back to the pandemic surge itself, when soaring demand let brands raise prices and chase increasingly wealthy customers rather than a broad aspirational base. LVMH’s own trajectory shows what happens once exclusivity succeeds so completely that much of its aspiring audience simply leaves.
The company still owns some of the strongest names in fashion, jewellery and beauty, but the fashion and leather goods division carries the weakest results.
Luxury Started Resembling Art
That shift reflects a deeper change in what luxury brands are actually selling. A high-end handbag increasingly arrives surrounded by the language of sculpture or painting: craftsmanship, rarity, creative direction, ateliers, limited production and cultural significance.
Fashion houses sponsor museums, commission architects and stage runway collections as artistic events.
There is substance behind some of that language, since a complicated couture dress or handmade leather object can require extraordinary skill, specialised materials and hours of human labour. But artistic framing also helps justify prices increasingly detached from production costs.
Art traditionally carries a high price partly because an original cannot be reproduced, whereas a handbag may be beautifully made but still remains a product manufactured in thousands. The more fashion borrows the economics of art, the more it risks losing the consumers who once treated luxury as attainable aspiration rather than elite collecting.
The Richest Customers Behave Differently
The downturn has not affected every brand equally. Companies serving the very richest clients have generally proved more resilient, since Hermès benefits from extreme scarcity and a customer base less sensitive to inflation, while jewellery has performed comparatively strongly.
LVMH’s Tiffany and Bvlgari businesses delivered 9 per cent organic growth during the first half of 2026.
That creates an awkward lesson for the industry: a €10,000 handbag may survive economic uncertainty better than a €2,000 one, because its buyer does not need to save for it.
The consumer squeezed out is often the person who made luxury culturally ubiquitous in the first place, affluent enough to aspire but not rich enough to ignore the price. Luxury spent years convincing consumers that higher prices meant greater desirability, and millions eventually accepted the first half of that proposition while rejecting the second.
Fashion can still borrow prestige from art and scarcity, but if it means abandoning the aspirational customer, exclusivity may prove commercially costly once too few people are left outside the window wanting in.
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