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

London CNN —

The value of some of the world’s best-known luxury companies is plunging as Chinese consumers pull back on spending, with even the most exclusive brands feeling the pain.

First-half sales at Bernard Arnault’s luxury powerhouse LVMH, the owner of Louis Vuitton and Christian Dior, dropped 10% year over year in Asia excluding Japan, a region dominated by China. The rout seems to be accelerating, with those sales tumbling 14% in the second quarter, according to results published lateTuesday.

Shares in LVMH, whose offerings also include high-end jewelry and luxury hotel stays, dropped 4.7% Wednesday, their biggest one-day decline since October. The stock had pared some of its losses by Friday early afternoon in Paris, but was still 4.4% lower than before the earnings were released.

The numbers from the bellwether of the luxury industry also had a chilling effect on the stock of Prada, which has fallen 3% from its closing level Tuesday. The Hong Kong-listed company is due to report half-year results next week.

“For now, the (luxury) market remains volatile as investors reassess the once-held belief that luxury brands are a safe-haven investment, shielded from broader economic downturns,” Jochen Stanzl, chief market analyst at CMC Markets, told CNN.

Europe’s top 10 luxury companies have lost $250 billion in market value since March, Reuters reported Thursday.

Jonathan Akeroyd, who was started as the Burberry CEO in April 2022, is being replaced.

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The decline in LVMH’s fortunes in China chimes with steep falls in sales in the world’s second-biggest economy reported by Richemont, the owner of jeweler Cartier, and Germancarmarker Porsche.