LVMH results and Shanghai Fashion Week put luxury's China hopes to the test

China is the focus of the luxury industry this week, The Business of Fashion wrote in its week-ahead briefing: LVMH reports third-quarter sales on Monday, 12 October, after the close of trading in Paris, and Shanghai Fashion Week runs until 16 October.

What analysts expect from LVMH

• Group: organic revenue up 1.5%, according to a Bloomberg-compiled consensus, led by a rise of nearly 8% in watches and jewellery and by growth in US sales.
• Fashion and leather goods: the key unit is forecast to fall 1.6%, after returning to growth last quarter for the first time in two years.
• Louis Vuitton: sales are seen down about 4%, according to HSBC estimates. After a trademark dispute with Chinese tea maker Molly sparked a patriotic backlash, research firm JL Warren Capital estimated that Vuitton’s China sales fell 30% in July and 20–25% in August, Bloomberg reported.
• Dior: investors want signs of progress from the product overhaul under creative director Jonathan Anderson.

Warning signs in the US

According to Citi, US luxury credit-card spending fell 6% year on year in September, a third straight monthly decline after drops of 4% in July and August, although wealthier shoppers stayed relatively resilient.

Chinese labels in the spotlight

The Shanghai schedule is dominated by Chinese brands such as Shushu/Tong and Mark Gong; Samuel Gui Yang is showing off-schedule, and Adidas and H&M are hosting events. Douyin will close the catwalk programme with a show of 45 emerging local designers. Barclays analysts, after visiting China, said quiet-luxury brands such as Loro Piana, Brunello Cucinelli and Zegna are outperforming the bigger houses there. Dior plans to stage its next cruise show in Shanghai on 14 May.