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Key points to remember :
-Global luxury product sales dropped by 1% in 2024 after years of double-digit growth, with negative forecasts expected (between -2% and -5%) for 2025. (Source: Bain & Co.)
-Revenue down for LVMH (by 2%), Chanel (by 4.3%) and Kering (by 12%), while Hermès performed well (up by 15%) and Richemont (up by 4%) to a lesser extent. Companies which raised prices the most in recent years are posting disappointing results.
-Widespread pressure on operating margins. Only Richemont improved net margin ratio. The top 5 posted an average margin of 17%, with Hermès leading at 30.3%.
-Significant fluctuations in market capitalisation: in 2024, LVMH fell by 19% and Kering by 40%, contrasting with a rise of 19% for Hermès and 17% for Richemont.
While the global luxury goods market had been growing steadily since 2020 – with sales up by 14% at constant rates in 2021, 10% in 2022 and 8% in 2023 – it fell by 1% last year to a total turnover of €394 billion. This decline was ultimately less severe than expected, with Bain predicting a 2% decline at current rates in November 2024. The last falls were recorded during the financial crisis of 2009 and the Covid-19 pandemic in 2020.
LVMH (2024 revenue: €84.68 billion) remains by far the world leader in luxury goods. Sales are four times higher than those of a closest competitor, Richemont. After 3 years of impressive growth (up by 44% in 2021, by 23% in 2022, and by 9% in 2023), the group (led by Bernard Arnault) saw revenue decline by 2% at constant rates in 2024. The last year of falling revenue was 2020, when business fell by 17%. LVMH was penalised by falls in Asia. Between 2022 and 2024, the Asian contribution fell from 51% to 37% of total business. In 2024, 2 businesses posted lower sales: down by 3% for fashion and leather goods (€41.1 billion, or 50% of business) and watches and jewellery (€10.6 billion).The 2 businesses selling products with lower face values—selective distribution with Sephora (€18.3 billion) and perfumes and cosmetics (€8.4 billion)—both grew by 2%.
Following the “top 5,” 4 players have revenues between €15 billion and €21 billion.
