LVMH’s sharpest sales drop since 2008 is more than a fashion story. Luxury’s downturn has historically foreshadowed recessions, and today it coincides with weakening confidence, asset stress, and slowing global demand.
Bernard Arnault's empire is crumbling in ways that should terrify anyone watching economic indicators. LVMH, the world's largest luxury conglomerate, reported a 9 per cent decline in fashion and leather goods sales during the second quarter of 2025, marking the steepest luxury sector contraction since the 2008 financial crisis outside of pandemic disruptions. When the world's wealthiest consumers stop buying $3,000 handbags and $50,000 watches, history suggests trouble follows shortly.
The luxury sector has long served as an indicator, with high-net-worth consumers typically the first to feel wealth effects from deteriorating asset markets and the first to curtail discretionary spending when confidence wavers. Their purchasing patterns, driven more by sentiment than necessity, provide early warning signals that conventional economic indicators often miss until damage becomes widespread. This summer's luxury collapse carries particular significance because it coincides with multiple stress points across global markets that suggest the current downturn represents more than cyclical weakness.
