Are luxury brands struggling to maintain sales momentum? Recent first-half 2025 financial reports from luxury conglomerates including LVMH-Moet Hennessy Louis Vuitton, Kering Group, Prada, and Hermès reveal that the luxury goods industry is confronting severe performance declines. These once-dominant luxury giants are collectively experiencing revenue and profit slides, with even traditionally strong performers like Prada and Hermès facing growth deceleration challenges.

Analysts point out that the rapid rise of emerging brands, diminishing effectiveness of pricing strategies, and complex tariff barriers are forcing international luxury companies to abandon their comfort zone of "price increases driving sales" and pivot toward cost control and localized innovation.

Last month, consulting firm Bain & Company, in partnership with Italy's luxury industry association, released a report indicating that the global luxury industry faces its most disruptive challenges this year. The report noted that "the industry's overall innovation momentum appears significantly weakened—in creativity, which forms the core competitive advantage, major luxury brands are collectively hitting bottlenecks." Previous data from the firm suggested that global luxury market sales could decline by 2% to 5% in 2025.

"The luxury industry has entered the second half," said Zhou Ting, Director of VIP Research Institute and luxury industry expert, who believes consumers' increasingly evident "de-branding" tendency has become an inevitable trend. "While luxury brands still have opportunities ahead and possess longer lifecycles, this depends on their ability to adapt to changes and embrace trends."

**LVMH-Moet Hennessy Louis Vuitton Parent Company Sees Revenue and Profit Decline, Kering's First-Half Net Income Nearly Halved**

The world's largest luxury conglomerate LVMH-Moet Hennessy Louis Vuitton reported declining revenue and profits for the first half. The group's revenue fell 4% to €39.8 billion, while net profit dropped 22% to €5.7 billion. This marks LVMH-Moet Hennessy Louis Vuitton's second consecutive quarter of revenue decline.

As an industry bellwether, LVMH-Moet Hennessy Louis Vuitton's weak performance casts shadows over the luxury market recovery. The core "Fashion & Leather Goods" division (including Louis Vuitton and Dior brands) became the biggest pain point, with organic revenue declining 7% to €19.12 billion in the first half, accelerating to a 9% drop in the second quarter. This division contributes nearly half of the group's revenue.

Another luxury enterprise, Kering Group, delivered equally disappointing first-half results. During the first half of this year, Kering's revenue fell 16% year-over-year to €7.587 billion, with second-quarter revenue declining 18% to €3.7 billion. Net profit reached €474 million, down 46% year-over-year, nearly halved.

Core brand Gucci saw first-half revenue drop 26% to €3 billion; Saint Laurent revenue declined 11% to €1.288 billion; only Bottega Veneta posted a modest 1% increase to €846 million.

More critically, Kering Group recorded double-digit declines in retail sales across all major global markets. The Asia-Pacific market, which includes China, saw first-half revenue fall 21%, the Japanese market declined 20% (comparable growth), while North American and Western European markets experienced first-half revenue drops of 12% and 13% respectively.

Kering Group Chairman and CEO François-Henri Pinault acknowledged the disappointing performance in the financial report, emphasizing that the group is responding through streamlining distribution networks and cutting costs. LVMH-Moet Hennessy Louis Vuitton Group Chairman and CEO Bernard Arnault, while stating that "the group demonstrates solid strength," expressed "high vigilance" for the second half, reflecting the deep-seated nature of industry difficulties.

The group has reportedly adopted a series of measures to address pressures, including cost control and closing inefficient stores.

**Management Reshuffles, Price Increases, and Store Closures—Three Strategies Fail to Resolve Difficulties**

Since the beginning of this year, luxury companies have faced multiple challenges, highlighting management gaps and financial pressures. In July, Louis Vuitton experienced a customer data leak affecting 420,000 Hong Kong consumers; Dior similarly suffered a data breach in May.

Zhou Ting's analysis suggests that such incidents expose luxury brands' insufficient investment in customer security, which will exacerbate "customer shortage" issues.

To alleviate financial pressure, Kering Group reduced net debt from €10.5 billion at year-end to €9.5 billion through real estate sales in the first half. Over the past two years, Kering's stock price has cumulatively fallen over 50%, with current market capitalization around €26 billion.

Despite sluggish luxury market consumption, facing performance declines and pressures from U.S. tariffs, luxury conglomerates continue relying on price increases. In January, April, and August this year, Louis Vuitton raised product prices three times, with increases concentrated at 2%-3%, and some styles seeing increases of 1,000 yuan. Kering Group also mentioned adjusting prices for some brands.

Industry insiders believe that frequent luxury price increases aim to alleviate sales growth pressure, but results may accelerate customer loss. In reality, luxury price increases have been criticized in recent years, with multiple luxury brands acknowledging the failure of repeated price increase strategies.

While experiencing performance declines, luxury conglomerates face internal personnel turbulence. LVMH-Moet Hennessy Louis Vuitton Group attempted to revitalize through senior management "reshuffles," with brands like Dior appointing new creative directors, but new product effects have yet to translate into actual growth.

Kering Group not only replaced creative directors across its three core brands but also pinned hopes on its new CEO taking office in September—Luca de Meo from Renault. However, the market remains cautious about its transformation, and new creative directors have failed to boost Gucci's sales.

Additionally, Kering Group is streamlining operations to reduce costs and increase efficiency. In the first half of this year, Kering Group had a net closure of 24 stores, with Gucci closing 18 stores net. As of June 30, Kering Group operated 1,789 stores globally.

**"Top Performers" Hermès and Prada Face Growth Deceleration Crisis**

As among the few "top performers" in luxury company first-half results, Hermès and Prada also harbor concerns beneath their growth halos. Hermès experienced slowing revenue growth with its Asia-Pacific growth engine stalling, performing below market expectations. For Prada, the main brand's continued weakness in key markets, combined with Miu Miu's slowing growth trend, creates dual obstacles on the growth path.

Financial reports show Hermès Group's first-half revenue increased 8% year-over-year to €8 billion, maintaining a relatively high operating profit margin of 41.4%. However, net profit of €2.25 billion declined compared to the same period last year.

While the core "Leather Goods & Saddlery" division revenue grew 12.4% year-over-year to €3.578 billion, non-core categories faced comprehensive pressure: the Ready-to-wear and Accessories division revenue grew only 5.5%, significantly down from the 15% growth in the same period last year; Perfume division and Watch business revenues declined 3.8% and 8% respectively.

After years of high-speed growth, facing overall pressure in the high-end consumer goods industry, questions arise within the industry about whether Hermès can still firmly grasp scarcity dominance. Moreover, Hermès continues raising prices—completing its latest round of price increases at year-end last year, with entry-level Birkin bag prices breaking through 100,000 yuan. According to Hermès' early-year policy, global price increases of 6% to 7% were planned for this year.

In the first half, Prada Group revenue increased 9% (comparable growth) year-over-year to €2.74 billion, with net profit of €386 million, nearly flat compared to last year. Behind this seemingly stable performance lies concerns about brand polarization and weakening growth momentum.

First, the main Prada brand shows obvious declining trends. First-half retail sales dropped 2% to €1.647 billion, with second-quarter declines expanding to 4%. The brand's full-year 2024 growth was only 4%, contrasting sharply with subsidiary Miu Miu's 93% growth in the same period.

Meanwhile, Miu Miu's growth "miracle" in recent years faces inflection point tests. Although latest financial reports show it remains a bright growth engine—first-half retail sales increased 49% to €780 million—growth has decelerated from 105% growth in Q3 2024 down to 40% in Q2 2025.

Industry experts believe that as competitors complete creative director transitions and new product cycles, Miu Miu's growth dividends may face severe challenges.

Additionally, the group's strategic moves during its transformation period add uncertainty. The April announcement of acquiring Versace for €1.25 billion represents one of the group's largest acquisitions, expected to complete in the second half. However, due to global luxury market sluggishness, Versace is mired in performance difficulties. Industry insiders believe that after Prada takes on this "hot potato," whether it can turn things around remains unknown.

Independent fashion consultant Xue Yun stated that when market dividends fade, conglomerates lacking multi-engine driving capabilities are more likely to encounter growth ceilings. "How to revitalize the main brand, integrate newly acquired assets, and reconstruct global layout will be key to determining whether Prada Group can weather the storm."