For nearly forty years, LVMH has been synonymous with continuous expansion, a conglomerate built through acquisitions to become the largest luxury group in the world. Today, however, something is changing. According to the Financial Times, the group led by Bernard Arnault is considering the sale of several brands in one of the most significant downsizing operations in its history.
FROM COLLECTOR TO SELLER
These are not marginal moves. On the table are assets covering the entire portfolio spectrum: fashion, cosmetics, and wines. Among the most notable names is Marc Jacobs, the historic American brand, as well as the stake in Fenty Beauty, the beauty brand founded by Rihanna. Fenty is not a brand fully controlled by LVMH but a joint venture: the French group owns about 50%, a stake currently valued between 1.5 and 2.5 billion euros. Alongside these is also the Californian producer Joseph Phelps Vineyards.
The overall value of the operations has not been quantified but is in the order of several billion euros and fits into a precise strategy: to clean up the portfolio and free up resources to reinvest in the most profitable brands.
A TURNING POINT AFTER YEARS OF ACQUISITIONS
The change of pace is even more evident when looking at recent history. Since 2000, LVMH has completed 206 acquisitions, including symbolic deals such as Tiffany for 16 billion dollars or Bulgari for 3.7 billion euros. In the same period, divestments have been 122, but almost always of limited size, like the New York brand Donna Karan or the British shirtmaker Thomas Pink.
In the last 18 months, however, the tune has changed. The group has already sold Off-White, the Chinese activities of retailer DFS, and the 49% stake in the Stella McCartney brand. Now the process is accelerating and taking on a systemic dimension.
LVMH’s perimeter remains enormous – over 75 brands across fashion, cosmetics, wines, hotels, and media – but the watchword becomes selection. Not by chance, even within the beauty division, possible exits from less performing brands are being considered, while in the wines and spirits sector – historically weaker – buyers are being sought for some labels.
BACK TO THE PILLARS
The strategy, explains the FT, is to focus efforts on the group’s true engines, such as Louis Vuitton and Dior. But here too, signs of slowdown emerge. After the pandemic boom, growth began to slow already in 2023, due to less lively demand.
The key issue is especially the aspirational consumer, who in recent years had supported the expansion of accessible luxury. Price increases – often above inflation – and reduced disposable income have eroded this base. The result is a cooling of demand precisely in the broadest segment.
This is why LVMH is acting on costs and margins, lightening the portfolio of less profitable brands. Not out of financial necessity – the group generates over 11 billion euros in free cash flow – but to adapt to a more complex context.
THE SIGNAL COMES FROM THE STOCK MARKET
The change in climate is evident in financial markets. LVMH lost about 28% on the stock market in the first quarter of the year, the worst result in its recent history, contributing to an overall destruction of about 100 billion dollars in the luxury sector.
This is not an isolated case. Richemont has lost about 20%, while Hermès has lost almost a quarter of its value. Even more significant is the change in perception: LVMH, historically traded at a premium, now trades at a 20% discount compared to competitors.
Luxury, once the locomotive of European stock markets, thus becomes an indicator of global uncertainty.
GEOPOLITICS AND FRAGILE DEMAND
The international context also weighs heavily. The Middle East, which accounts for between 5% and 6% of global sales but represents one of the most dynamic markets, has suffered a sharp slowdown due to the conflict with Iran and geopolitical tensions.
Dubai, with over 81,000 resident millionaires and about 250,000 daily visitors to its main mall before the crisis, has seen traffic drop to about 190,000 visitors. A decline that hits a fundamental hub for global luxury, especially because about 60% of spending in the Emirates is linked to international tourism.
The slowdown is also reflected in other high-end sectors: in the automotive sector, some local dealers have recorded a 30% drop in sales, a sign that even the wealthiest customers are becoming more cautious.
CHINA NO LONGER LEADS
At the same time, China is weakening, having been the main growth engine for over a decade. In 2025, luxury spending fell by 13%, to about 75 billion dollars, with a loss of about 20 million customers.
This is not just a cyclical phase. Preferences are changing: less interest in Western logos, more attention to experiences and local brands. Forecasts indicate a further decline in 2026, a sign of structural transformation.
THE NEW ARITHMETIC OF LUXURY
The picture is confirmed by the Mediobanca report, which analyzes 75 large global groups. In 2025, the total turnover of the fashion system reaches 541 billion euros, growing by just 0.9%. Luxury, after years of expansion, records a contraction of 2.1%.
LVMH remains the leader with 80.8 billion in revenues, but the context has changed. Margins are under pressure: in 2025 they stand at around 14.1% on average, with luxury at 19.7%, down compared to previous years. Textile tariffs rise from 5.3% to 8.9% and logistics costs increase due to geopolitical tensions.
The customer base is also shrinking: from about 400 million in 2022 to 340 million in 2025. Sixty million fewer consumers, a figure that summarizes better than any other the change of phase.
PRICE IS NO LONGER ENOUGH
For years, the sector has supported growth through continuous price increases. But today that lever is weakening. Consumers demand consistency between price and value and become more selective.
This explains why some segments hold up better than others. Ultra-luxury continues to perform, while more accessible tiers suffer. At the same time, categories like lifestyle grow more than traditional luxury, a sign of shifting demand.
FROM PRODUCT TO EXPERIENCE
The change is also cultural. More and more consumers prefer to spend on travel, restaurants, and wellness rather than material goods. Luxury is shifting from ownership to experience.
This is also reflected in retail: stores grow by just 1.2% and become relational spaces more than places of purchase. Future growth will increasingly depend on the ability to build relationships and foster customer loyalty.
A SECTOR REORGANIZING
In this context, companies are moving. Dolce & Gabbana renegotiates about 450 million in debt, Valentino receives a 100 million injection, while Prada accelerates on consolidation.
It is a sector that needs capital and scale, more than storytelling.
IT’S NOT A COLLAPSE, IT’S A TRANSITION
LVMH’s move fits perfectly into this scenario. Selling brands does not mean retreating, but adapting. The group is redesigning its perimeter to face a phase where growth is no longer automatic.
Luxury is not collapsing. It is entering a new season, more selective and more mature.
