{"id":1788,"date":"2024-10-18T05:00:00","date_gmt":"2024-10-18T05:00:00","guid":{"rendered":"https:\/\/friscotimes.org\/?p=1788"},"modified":"2024-10-18T18:44:47","modified_gmt":"2024-10-18T18:44:47","slug":"lvmh-cfo-is-convinced-becoming-more-affordable-isnt-the-companys-path-forward","status":"publish","type":"post","link":"https:\/\/friscotimes.org\/?p=1788","title":{"rendered":"LVMH CFO is convinced becoming more affordable isn’t the company’s path forward"},"content":{"rendered":"\n

There\u2019s no way to sugarcoat it\u2014LVMH is in trouble. The French giant\u2019s third-quarter revenue fell by 3%, slipping below analyst forecasts and punctuating the state of the luxury industry.\u00a0<\/p>\n

\n

LVMH, home to well-known brands such as Christian Dior and Celine, noted sluggish demand from shoppers at various points this year.\u00a0<\/p>\n

While the company\u2019s fate isn\u2019t nearly as dire as some rivals like Kering, which issued a profit warning earlier this year, trailing sales in LVMH\u2019s fashion, leather, and wine and spirits segments aren\u2019t a good sign.\u00a0<\/p>\n

But the company shrugged off the idea of drawing customers like other regular retail companies would: with more discounts.\u00a0<\/p>\n

LVMH\u2019s CFO Jean-Jacques Guiony said that the company wouldn\u2019t \u201cchange strategies\u201d just to offset the lukewarm demand in luxury now during LVMH\u2019s earnings call earlier this week.\u00a0<\/p>\n

Another strategy that simply won\u2019t fit the company? Offering a range of affordable products.\u00a0<\/p>\n

\u201cI think it would be a mistake,\u201d Guiony said in a call. \u201cWe still keep on the idea that we should stay faithful to what has been the recipe of our success over the years.\u201d<\/p>\n

The French conglomerate run by Bernard Arnault is home to a slew of high-end jewelry, fashion, and spirits brands. Many of its products, including those under the eponymous Louis Vuitton brand, retail for well above $1,000, making them a tough sell for aspirational buyers.\u00a0<\/p>\n

However, the company has long operated in the high-end retail market and argues that going the discount route would dilute its offerings.\u00a0<\/p>\n

There have been recent cases of brands\u2019 implementing such a strategy going wrong. Take Kate Spade, for example. It decided to lean heavily on promotions until Coach\u00a0finally acquired<\/a>\u00a0it<\/span> for $2.4 billion in 2017.\u00a0<\/p>\n

Many luxury goods have been forced into the mark-down pile<\/a> from brands like Versace and Burberry, which cater to entry-level luxury buyers. The reason? Shoppers have gone from spending generously to becoming reluctant about high-end purchases amid tough macroeconomic conditions.\u00a0<\/p>\n

Economic policies, which have also prompted consumers to pull their purse strings right, have had ripple effects on the luxury industry. For instance, when China indicated upcoming stimulus measures to help revive its economy, LVMH and other luxury players saw their shares rise in the hopes that it would end shoppers\u2019 hesitation. But when those promises failed to deliver, the same companies saw their shares fall.\u00a0<\/p>\n

LVMH CEO Arnault\u2019s wealth has also ebbed and flowed with every major news event\u2014from China\u2019s stimulus to the company\u2019s quarterly earnings.\u00a0<\/p>\n

While it\u2019s still uncertain how long a recovery might take, LVMH is sure it won\u2019t change its approach too dramatically just to be relevant in the short term, even if that means a few more months or years of sluggish sales ahead.<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

There\u2019s no way to sugarcoat it\u2014LVMH is in trouble. The French giant\u2019s third-quarter revenue fell by 3%, slipping below analyst forecasts and punctuating the state of the luxury industry.\u00a0 LVMH,…<\/p>\n","protected":false},"author":297,"featured_media":1789,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[6],"tags":[2728,2726,2729,2727,325,1073,2730],"jetpack_publicize_connections":[],"yoast_head":"\nLVMH CFO is convinced becoming more affordable isn't the company's path forward - Frisco Times<\/title>\n<meta name=\"description\" content=\"\u201cI think it would be a mistake,\u201d said LVMH CFO Jean-Jacques Guiony during the company's Q3 earnings call this week.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/friscotimes.org\/?p=1788\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"LVMH CFO is convinced becoming more affordable isn't the company's path forward - 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