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- Bernard Arnault's last visit to China drew large crowds and received social media coverage.
- LVMH, led by Arnault, has grown significantly in China since entering the market in 1992.
- LVMH's sales in China have declined recently due to a shift towards domestic brands and economic malaise.
Chinese customers are such big fans of luxury brands like Louis Vuitton that they reacted strongly to Bernard Arnault visiting their country.
When the CEO of French fashion house LVMH visited Beijing and Shanghai with two of his adult children last year, large groups of people came out to see him. A few of them asked him to bless their babies, he told Bloomberg in an interview.
"It was a little strange for me," he said.
During the same trip, Chinese social media was filled with details about what he ordered at a Cantonese restaurant in Shanghai. Local reports highlighted his tours of high-fashion malls in Beijing.
The French billionaire is one of the world's richest people, alongside Amazon founder Jeff Bezos, and Tesla CEO Elon Musk. Arnault is worth $205 billion, per the Bloomberg Billionaires Index.
LVMH's first venture in China dates back to 1859, when spirit company Hennessy made its initial shipment of cognac to the country. Louis Vuitton joined the market when it opened its first boutique in Beijing's Palace Hotel in 1992.
The company doesn't break out financial results by geography, but HSBC estimated that China was the luxury conglomerate's second-biggest market by sales last year.
Unlike other foreign companies that are cutting their presence in China because of geopolitical risks, some luxury companies are cementing themselves further. LVMH had 950 stores in China and employed 24,000 people as of 2019. It opened another 58 stores last year, per Bloomberg.
"We have significant growth with Chinese customers, which continues unabated," chief financial officer Jean-Jacques Guiony said in January following the company's 2023 earnings report.
But 2023 was rough for the company. The stock fell almost 30% over the year from its April high — a rout attributed to waning Chinese demand for luxury goods.
The trend has continued this year. LVMH reported in April that Asia's revenues outside Japan fell 6% in the first quarter compared with the same period a year ago. The slump hit Gucci owner and top rival Kering as well, as Chinese customers ditch foreign luxury for gold and domestic brands amid prolonged economic malaise.