Christian Dior , owned by the world’s biggest luxury company, LVMH , had a surprisingly big dip in sales in the first three months of the year. LVMH doesn’t split out Dior’s numbers but said the brand performed worse than the company’s overall fashion and leather division, where sales fell 5% from a year earlier.
Chanel also stumbled. The French brand is privately held, but its owners have released annual results for the past eight years. Chanel said sales fell 4% in 2024 and operating profit plunged almost a third.
Handbag maker Hermès and Cartier’s owner Richemont, are still turning in healthy growth. The two companies’ sales both rose 7% in the first three months of 2025, compared with a year ago.
All four companies are considered to be at the top of the luxury pile and have little exposure to spending by aspirational shoppers, which tends to dry up when times are tough. But they have differed in their approach to pricing.
Luxury companies began to charge more during the pandemic, when excess savings sent demand for their goods through the roof. Brands raised prices by an average of 36% between 2020 and 2023, according to Bernstein analysis.
Luxury brands spend billions of dollars a year on advertising to convince shoppers to pay steep markups on their goods. Charging less is an admission that they have misread the market and that their goods aren’t as desirable as thought.
Labels will sit on their hands until inflation and income growth slowly make their goods seem more affordable. They can also design new lower-priced products to boost sales.
Brands that showed restraint during the pandemic have the best chance of shielding their profit margins from President Trump’s tariffs. Hermès has already passed on the full impact of the levies to its American customers. Richemont hasn’t announced any increases yet, but demand for its brands in the U.S. looks strong enough for the company to charge more. Others like Chanel may be forced to swallow the cost of tariffs.
At the end of the day everything has its price, even luxury.
