LVMH Faces the 2024 Slowdown: Headwinds and Prospects

Administrateur
Jun 6
3 min read

LVMH (Moët Hennessy – Louis Vuitton) is the undisputed leader in global luxury. Its 75 maisons span fashion, leather goods, wines & spirits, beauty, jewellery, hospitality and selective retail. Turnover surged from €53.7 billion in 2019 to a record €86.2 billion in 2023, with operating profit doubling to €22.8 billion. In 2024, however, revenue dipped to €84.7 billion and operating profit to €19.6 billion, trimming the margin to 23.1 %. This 1,500-word report unpacks the business architecture, geographic mix, drivers behind the 2021-23 boom, the 2024 pause (US and Asian headwinds, margin pressure) and the levers LVMH is counting on to reignite growth.

A uniquely diversified business portfolio

Fashion & Leather Goods – Nearly half of revenue and over two-thirds of group profit, powered by Louis Vuitton, Dior, Fendi, Celine and others, all enjoying exceptional pricing power.
Wines & Spirits – About 7 % of sales but historically a 30 %+ margin bloc, thanks to Moët & Chandon, Veuve Clicquot and Hennessy.
Perfumes & Cosmetics – 10 % of sales; Dior, Guerlain and Fenty Beauty lead, but heavy marketing holds margins around 8-9 %.
Watches & Jewellery – 13 % of revenue after the Tiffany acquisition, with 15-20 % margins at Bulgari, Tiffany, Tag Heuer and Hublot.
Selective Retailing – 20 % of turnover via Sephora, DFS and iconic department stores; strategic for distribution control yet structurally low-margin (5-8 %).

Three core geographic engines

Asia ex-Japan – Historically the largest engine, dominated by Chinese clientele. Rebounded after zero-Covid but contracted mid-2024 as China’s property crisis hit sentiment.
United States – The second pillar; three years of exuberance ended in 2024 as inflation and higher rates curbed “aspirational” luxury spending, though ultra-high-net-worth clients held firm.
Europe – Buoyed since 2022 by a tourist revival and affluent locals; growth slowed but stayed positive in 2024.

Japan, the Middle East and Latin America round out a highly diversified footprint.

Family-driven governance for the long term

The Arnault family controls 49 % of capital and 64 % of voting rights via Groupe Arnault and Christian Dior SE. Four Arnault children now sit on the board, ensuring continuity, while free-float shareholders maintain market discipline.

2021-23: the post-Covid surge

Catch-up demand after lockdowns drove double-digit organic growth.
Relentless pricing on iconic products supported margins.
Creativity and innovation – LV x Yayoi Kusama, Dior Sauvage, Tiffany Lock, Tag Heuer Connected, etc.
Tiffany turnaround – profit up 55 % two years after acquisition.
Travel-retail revival lifted Sephora and DFS from 2022 onward.

The result: record cash generation, peak profits and briefly Europe’s highest market capitalisation.

2024: dissecting the slowdown

United States on pause

Stimulus tailwinds faded, inflation squeezed discretionary budgets and comparison bases were sky-high. Ultra-rich Americans kept spending, but volumes flattened.

China hits the brakes

A severe property crunch eroded confidence and youth unemployment spiked. Mainland demand fell, though wealthy Chinese shifted purchases to Tokyo, Paris or Dubai, cushioning LVMH’s overall numbers.

Margin pressure

Wines & Spirits – lower Cognac and Champagne volumes, sticky costs, adverse FX.
Fashion & Leather Goods – flat sales versus rising creative, retail and labour costs.
Perfumes & Cosmetics – heavier launch and packaging expenses, plus lower-margin travel-retail mix.
Selective Retailing – margin held steady but remains structurally thin.

Group margin still beats pre-Covid levels, underscoring model resilience.

Cyclical dip or structural warning?

Cyclical case

Normalisation after outsized 2021-22 boom.
Macro drag in 2024 (US tightening, China slump) likely temporary.
Luxury fundamentals intact: ultra-wealthy still buying, demographic tailwinds, unbroken brand desirability.
LVMH’s historic agility and €10 bn+ free cash flow enable rapid adaptation.

Structural watchpoints

US market maturing; Gen Z preferences evolving.
Heavier reliance on Chinese consumers over time.
ESG scrutiny of luxury supply chains.
Sharper competition from Hermès, Cartier and fast-growing indie brands.

On balance, 2024 looks more like a cyclical breather than a secular downturn.

Medium-term growth levers

Geographic rollout – deeper penetration of Tier-2 Chinese cities, India, ASEAN, Middle East and expanded US production capacity.
Product and digital innovation – artistic collaborations, AR/VR shopping, CRM-driven personalisation, AI across the value chain.
Premiumisation – high jewellery at Tiffany, exotic-skin LV bags, Dior and Bulgari haute horlogerie.
Hospitality & lifestyle – scaling Cheval Blanc and Belmond to capture experiential luxury.
Disciplined M&A – bolt-on jewellery or Italian fashion houses; joint ventures in ultra-premium spirits.

With a fortress balance sheet, LVMH can finance growth while preserving flexibility.

Conclusion

After an extraordinary run through 2023, LVMH absorbed a demand shock in its two core markets during 2024. The drop in volumes and the margin squeeze appear cyclical rather than structural. Family stewardship, unrivalled brand equity and financial firepower position the group to rebound once macro clouds lift. Geographic expansion, premiumisation and potential acquisitions should restore a path of sustainable mid-single-digit organic growth, reaffirming LVMH’s leadership in global luxury.