Is recovery in sight for the luxury sector? LVMH thinks so

The fashion industry’s mood may be brightening, if only by a few degrees. LVMH, the world’s largest luxury group and the sector’s perennial bellwether, delivered a cautiously optimistic third-quarter report, suggesting that the long-anticipated recovery in global luxury spending may finally be taking shape.

After several quarters of challenges, the group—whose portfolio spans Louis Vuitton and Dior to Celine and Loewe—reported that revenues in its key fashion and leather goods division fell by just 2 percent in the three months through September. While modest, this represents a marked slowdown from the 9 percent decline in the previous quarter. Shares of LVMH rose 14 percent on Wednesday, according to the Financial Times, buoyed not only by the improved sales figures but also by news of Maria Grazia Chiuri’s appointment as Fendi’s creative director, a move that injected fresh optimism across the luxury sector.

For Bernard Arnault’s empire, the early signs of a turnaround have been driven less by price hikes than by renewed consumer appetite, particularly in China, where shoppers are returning to boutiques after a prolonged slump. Analysts note that the group’s gains were largely volume-driven rather than the result of further mark-ups, a welcome change in a market weary of relentless price increases.

Yet any significant uplift is unlikely to be fully realised until the second quarter of 2026, once the new creative directors’ collections have had time to circulate on the shop floor. At Dior especially, high hopes are pinned on sales of shoes, bags, and jewellery, even as Jonathan Anderson’s fashion vision continues to divide opinion among critics and public alike.

New designers playing their part in the rebound

The appointment of new creative leads across LVMH’s houses has injected a sense of anticipation rarely seen since the post-pandemic boom. Mr Anderson and Ms Grazia Chiuri's moves to Dior and Fendi, Michael Rider’s debut at Celine, and the Proenza Schouler founders’ arrival at Loewe signal an internal renewal aimed at recapturing what fashion once did best: make people desire again.

Still, no one is predicting a return to the frenzy of 2021. The next luxury upswing is likely to be subtler, more grounded in value perception and creative credibility. As one analyst noted, even the very rich dislike feeling they are being overcharged.

If so, LVMH appears well positioned. With its portfolio heavily weighted toward accessories, the group may be poised for a catch-up. Between 2022 and 2025, “soft” luxury categories have trailed jewellery’s 4 percent annual growth, according to RBC research. A recalibration could favour the likes of Vuitton, Celine, and Loewe, though opportunity also lies in the group’s watch and jewellery divisions.

For now, the numbers suggest resilience more than triumph. but in an industry where perception is everything, that may be sufficient. When the world’s most valuable luxury group stirs, the rest of the sector often follows. All eyes now turn to Kering’s Q3 results, due October 22, and the performance of its flagship brand, Gucci.