Capri, Richemont earnings: Luxury recalibrates as China sales slip

What happened As luxury’s momentum sputters, more industry players are turning in weak sales performance. Capri Holdings, parent company to Versace, Jimmy Choo, and Michael Kors, saw revenue drop 16.4% YoY to $1.08 billion in Q2 of FY 2025, with Versace plummeting by 28.2% and Michael Kors by 16%, despite Jimmy Choo’s 6% growth, it reported on November 7. The disappointing results arrive after a US federal judge blocked Coach owner Tapestry’s (TPR) $8.5 billion deal to acquire Capri last month. Also, Richemont last week reported a 1% YoY dip in global sales, impacted by an 18% slide in Asia-Pacific, offset only by a 25% boost in Japan and 12% growth in the Americas. LVMH and Moncler reported similar trends last month, both posting 3% sales declines, while Kering’s revenue fell by 16% YoY. With few brands remaining untouched by the global luxury slowdown, the heavyweights are coming under increasing scrutiny. The Jing Take As demand wanes, especially in China, the market may be on the cusp of a consolidation phase. Italy’s OTB Group, previously considered an industry dark horse, recently scaled back its retail footprint in China. The company has closed several of its Maison Margiela, Marni, and Jil Sander stores across major cities and retail hubs – including in Hong Kong’s K11 Musea, Sogo Causeway Bay, and Chengdu IFS – as it restructures its retail network. Louis Vuitton, too, has tempered its China expansion plans, opening just one new store, located in Nanchang City’s Jiangxi Province, in the mainland this year. Despite owner LVMH emphasizing its commitment to continuing investment in the Chinese market during its Q3 performance meeting, the single new store for Louis Vuitton this year reflects the brand’s more vigilant approach to expansion. At the same time, LVMH’s venture capital arm, LVMH Luxury Ventures, has made a minority stake investment in the Swedish label Our Legacy, signaling a strategic shift toward global mid-tier luxury brands. This move reflects LVMH’s intent to diversify its portfolio, gaining access to new markets and tapping into more resilient segments, such as affordable luxury, to meet evolving consumer demand. With aggressive expansion plans on pause, industry players are getting strategic with their investments. Burberry, for example, has sparked takeover rumors, with Moncler, backed by LVMH, reportedly eyeing the brand to form an “outdoor specialist giant” – though both parties have declined to comment. Meanwhile, Mulberry last month rejected an 83 million British pounds ($106.9 million) takeover bid from Frasers Group, which already holds a 37% stake in the British brand, after the company posted a 34.1 million British pounds ($28.2 million) pre-tax loss and announced plans to raise 10 million British pounds ($12.9 million) through new shares. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Is luxury in the midst of a recalibration?

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Is luxury in the midst of a recalibration?