The world's biggest luxury brands are hurting as Chinese shoppers rein in spending

The value of luxury companies is decreasing as Chinese consumers cut back on spending, affecting even the most exclusive brands. Sales at LVMH, the owner of Louis Vuitton and Christian Dior, dropped significantly in Asia excluding Japan, with a 14% decrease in the second quarter. This decline impacted the stock prices of LVMH and Prada. The luxury market is currently volatile, challenging the belief that luxury brands are a safe investment. European luxury companies have lost $250 billion in market value since March. Other luxury companies like Richemont, Porsche, and Mercedes-Benz also reported declines in sales in China. However, Hermes reported sales growth in the Asian region. The slowdown in China’s economy is impacting luxury spending. China’s economic growth in the second quarter was weaker than expected, affecting consumer spending and leading to a decrease in extravagant purchases by the wealthy.