In 2025, LVMH, the French luxury giant, experienced significant financial and strategic challenges. The company's stock value declined by approximately 27% year-to-date and 35% over the past 12 months.
The first quarter of 2025 saw a 3% decrease in organic sales, with a 5% drop in the fashion and leather goods segment. Sales in Asia, excluding Japan, fell by 11%, and in the United States by 3%. These declines were attributed to weaker demand from Chinese consumers and geopolitical uncertainties.
Moët Hennessy, LVMH's wines and spirits division, faced a crisis, reporting a €1.5 billion cash loss in 2024. This was due to aggressive price increases, costly acquisitions, and unsuccessful direct-to-consumer sales initiatives. Alexandre Arnault and CFO Jean-Jacques Guiony were appointed to lead a recovery plan.
Bernard Arnault, 76, has no clear succession plan, raising investor concerns. Several financial institutions, including Barclays and Morgan Stanley, have downgraded LVMH's stock ratings due to these challenges.