Five percent. That's how far sales fell in LVMH's biggest division last quarter, and the market had braced for two. And somewhere on a resale site, a Chanel bag is going for more than the boutique charges. Welcome to Fashion Business Daily. Today, LVMH kicks off luxury's third-quarter earnings season, Shein's British accounts land just as its duty loophole gets an end date, and Fashionphile puts a price on Matthieu Blazy's first year at Chanel.
Laure Guilbault, writing in Vogue Business:
Revenue from LVMH’s fashion and leather goods division fell 5% to €8.24 billion, versus consensus expectations of a 2% decrease. This follows a return to positive growth for the all-important division in Q2 (+1%), which was seen as an inflection point after seven consecutive quarters of negative growth.
So the inflection point lasted exactly one quarter. Everyone spent the summer saying the bottom was in. These are company-reported organic numbers from Monday evening. Group sales rose 1% to 18.5 billion euros, roughly what analysts expected. The miss is all in fashion and leather. Asia excluding Japan fell 5%, while the US rose 5%, Europe 4% and Japan 6%. CFO Cécile Cabanis blamed a Chinese consumer whose 'feel-good' factor faded right as the quarter began, plus the Middle East. And Louis Vuitton came in just below that minus five. Part of it is the Molly Tea fight, a trademark win that went down badly on Chinese social media. Cabanis says it probably hurt early in the quarter. A shipping partner problem knocked off just over a point too. Both of those are management's explanations, Joey, not audited ones. The house-by-house reads are interesting, though. Dior was flat. Loro Piana and Rimowa are outperforming, and Cabanis says Celine grew double digits in the US. Celine under Michael Rider growing double digits is a product story. Shoes up double digits, the Soft Triomphe selling. People want the stuff. And on Jonathan Anderson at Dior, she says women's ready-to-wear is pulling but men's needs more work. That's a CFO being unusually candid. She also said self-help comes first, and nobody gave a date for China to recover. Kering and Hermès both report on Thursday, October 22. If Louis Vuitton can't hold up in China, I wouldn't expect Gucci to manage it either.
From The Founder Gazette:
Shein's UK division sold £2.58bn of goods last year, up 26 per cent on the £2.05bn it reported for 2024, according to accounts filed at Companies House.
Two and a half billion pounds, run by a hundred and thirteen people in Britain. That's about twenty-three million in sales per head. There isn't a shop floor in that business. Pre-tax profit at the UK arm rose 18% to 45.2 million pounds. On the claim that it's now bigger than Asos, there's a catch. RocketNews points out that Asos's 2.47 billion includes revenue from outside the UK. Shein's figure is UK only, so the two numbers don't measure the same thing. Shein credits festivals, Wireless and Creamfields, and a pop-up on Oxford Street. Come on. What actually made this work is the £135 rule. Right. Under the UK's de minimis rule, overseas sellers can ship parcels worth 135 pounds or less straight to shoppers with no customs duty, which a British retailer holding local stock doesn't get. The Treasury now says the exemption ends by October 2028 at the latest. That's six months sooner than first planned. Sainsbury's, Currys and AO World want it gone even sooner. Every other region has already shut that door. The US killed its exemption, and the EU added a three-euro parcel duty in July. Shein said itself, in a filing before its Hong Kong listing, that losing the US exemption hurt its sales there. So Britain is the open market with a closing date, and growth this fast gives the Treasury a reason to move. The group's last quarter showed profit down 67%, which it put down to fuel and freight costs. Without the duty break, the question is how much of that 26% growth survives.
Samantha Conti, writing in WWD:
Luxury re-commerce platform Fashionphile, which trades in pre-owned designer handbags, shoes, watches, fine jewelry and accessories, said secondhand buyers have been paying 13 percent above the retail price for the Chanel Souplissimo and the Archetype Tote, and 15 percent above retail for the Chanel Urban Essential bags.
This is the one I care about. Resale over retail is the cleanest heat signal there is. Blazy's bags are selling used for 13 to 15 percent above what Chanel charges new. You can't buy that with a campaign. It is a real signal. Remember the source, though. This is Fashionphile's own report, out today, and it covers what changed hands on its platform. It's not the whole resale market, and it doesn't say how many of these bags actually sold. Fine, but look at the rest of the list. The Louis Vuitton Speedy is the top seller for a second year, and its value is up 16.2%. Prada's Re-Edition went from eighth to third. And the Fendi Spy is up 127 percent on Y2K nostalgia. The 2004 bag is back. That Speedy number sits a little oddly next to Monday's call, where Louis Vuitton trailed a division that was down five. Clearly the secondhand market still wants the Speedy. The new full-price bags are the ones having a hard time. And that's what Chanel's teaching everyone. Bring in a designer people actually want and you get a premium. Rotate through creative directors like they're middle managers and you get Monday.
Do you work in luxury, in resale, or on a cross-border e-commerce team? Then you've seen these numbers up close, and we'd like to hear what we're missing. Write to fashionbusinessdaily at lantern podcasts dot com.
On our watch list: Kering and Hermès results on October 22, and whether the UK pulls that £135 deadline any earlier. You'll find the source for every story in the show notes. Fashion Business Daily is one of the Lantern Podcasts, and we'll have more for you tomorrow.