Danger isn't yet at the door. But the poor economic climate of the third quarter of 2023 is also affecting the luxury goods sector. Sales figures published by the major French groups have revealed a slowdown in the growth of sales of bags, suits and perfumes for some, and a much more severe fall for others.

Clearly, the spectacular rebound seen in 2022 is ancient history. The Bain & Company consultancy and the Italian Altagamma Foundation have already issued a warning: "After the 2022 record, the global luxury market is expected to record growth of 5% to 12% in 2023," estimated their sector study, published in June. LVMH confirmed a "return to normal" on October 10.

This luxury group, which acts as a barometer for the luxury industry, published sales of €19.96 billion, achieved in three months this summer. This is 9% more than in the third quarter of 2022, at constant exchange rates. But this growth is lower than the +17 % recorded in the first half of 2023. In this group founded by Bernard Arnault, sales of leather goods and fashion brands are no exception to the phenomenon: they came out 9% higher in the third quarter, after rising 20% in the first half of the year.

The landing for its French rival Kering is much more complicated. The group chaired by François-Henri Pinault saw its sales fall by 9% in the third quarter of 2023, at constant exchange rates, to €4.46 billion. "Over and above the difficult macroeconomic context and the slowdown in demand in the luxury sector," the French group's underperformance is reportedly linked to "the impact of decisions aimed at reinforcing the exclusivity" of the Kering group's brands, explained CEO François-Henri Pinault, in a press release on Tuesday, October 24.

Kering has been particularly penalized by Gucci's bad patch since 2020: the "new chapter" it has been writing since the appointment of a new artistic director, Sabato De Sarno, at the beginning of 2023, and the "rationalization" of its distribution, something intended to strengthen sales under the brand.

This luxury brand – accounting for half of Kering's global business in 2022 – posted a 7% drop in third-quarter billings, on a like-for-like basis and at comparable exchange rates, compared with the same period last year. As Gucci is one of its most profitable brands, this underperformance is bound to affect the French group's operating margin in 2023, Kering's management agreed on Tuesday, October 24. Yves Saint-Laurent – the group's other major subsidiary – is also showing signs of weakness. Sales plunged by 12% in the third quarter.

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