Despite Increased Sales - Luxury Giant's Stock Plummets

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Despite Increased Sales - Luxury Giant's Stock Plummets
Photo: Mark Lennihan/AP/TT

The French luxury conglomerate LVMH is clearly falling on the Paris stock exchange after today's financial report. Concerns about the luxury industry's recovery are now pulling down the sector.

By lunchtime, the stock has fallen by over 5 percent and is dragging down sector colleagues such as Christian Dior and Kering (owner of, among others, Gucci) in its fall.

The explanation is the report presented this morning, which shows that sales did indeed increase by 1 percent, but where there had been hopes for even greater growth beforehand. This follows competitor Richemont, owner of, among others, Cartier, recently reporting strong sales.

While consumers have returned in Europe, the USA, and Japan, there are still question marks surrounding China, which traditionally is one of the most important markets for these companies.

For LVMH's part, a decline of 10 percent is noted for this region, the only one of the company's geographic areas showing negative development.

What I expect to see is a gradual recovery. It will take time, assesses the company's CEO Bernard Arnault about the situation in China.

A positive sign for the company is that jewelry and watch sales increased unexpectedly during the fourth quarter. As for the beverage segment, where LVMH is the owner of champagne producer Moët & Chandon, a recovery is expected within a two-year period.

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By TTEnglish edition by Sweden Herald, adapted for our readers

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