e-digit rates. However, its biggest division, Fashion & Leather Goods, saw sales falling 5 per cent organically.  LVMH shares, already down roughly 40 per cent this year according to Reuters, fell again on Tuesday, with Hermès, Kering and Richemont pulled lower with it. As the first major luxury group to report each quarter, LVMH tends to set the tone for the sector, and this time the tone was cautious. A Chinese problem, concentrated in one division Chief financial officer Cécile Cabanis attributed the weakness to spending by Chinese customers, which fell by a mid-teens percentage in the quarter. On the Mainland the decline reached double digits.   Chinese shoppers travelling abroad cut back by a mid-single-digit percentage. Asia excluding Japan, about 27 per cent of group revenue, was the only region to shrink. The damage was concentrated in Fashion & Leather Goods, which accounted for almost 45 per cent of group revenue in the quarter.  Louis Vuitton holds, Dior builds Within that division, Louis Vuitton performed slightly below the average, Cabanis said. She added that a logistics issue had shaved just over one percentage point off Louis Vuitton’s organic growth in the quarter, and ruled out price cuts or other shortcuts to revive growth. The house also faced calls for a boycott in China after a trademark dispute with tea chain Molly Tea.  Arnault was more expansive about Dior, though he was careful to defer to his sister Delphine, the house’s chief executive.  He told CNBC that LVMH has a habit of keeping designers for a long time, citing Nicolas Ghesquière’s decade-plus tenure at Louis Vuitton, and that designers usually need time to settle in. Jonathan Anderson, he said, had not needed it.  “It’s booming immediately, which is great for us and great for Dior.” Dior’s revenue was flat in the third quarter, held back by the same Chinese slowdown, though Cabanis said the house was outperforming the division, growing year to date and posting double-digit growth with American clients. Women’s ready-to-wear has been the clearest signal of appetite for Anderson’s work. Menswear is less advanced, and bags, as permanent products, take longer to build. The reading for retail executives is that creative renewal is landing where demand exists, but a new designer cannot offset a macro shock in the market where the brand sells most. Elsewhere in the portfolio the renewal has been uneven. Celine under Michael Rider is gaining traction in the United States and growing at double digits in shoes, while Fendi, now led creatively by Maria Grazia Chiuri, is described as still early. Loro Piana and Rimowa continued to outperform. What is holding the group up Watches & Jewelry grew 6 per cent organically, down from 11 per cent in the second quarter. Cabanis attributed the slowdown partly to China and partly to a tougher US comparison base at Tiffany & Co, where about 40 per cent of stores have now been renovated. Tiffany has not always helped itself in China either: in a late-September Xiaohongshu post reported by Jing Daily, a client who had spent more than 200,000 yuan (about NZ$52,700) at the brand’s Chengdu Taikoo Li boutique said the Mid-Autumn mooncake gift box her sales associate promised had gone to another customer by mistake, a small clienteling lapse of the kind brands can least afford when Chinese spending is already falling.  Cabanis also signalled that price increases tied to gold costs should moderate as the metal’s price stabilises, and that Bvlgari faces a harder comparison in the fourth quarter. Reported growth of 7.8 per cent in the division still outpaced every other business group. Selective Retailing rose 8 per cent organically, the fastest of any division, on the back of Sephora, which gained share in several countries and expanded its exclusive launches, including Rhode and several C-beauty brands. Reported growth was only about 2 per cent because of continued disposals at DFS, most of whose businesses have now been sold. Like-for-like sales account for about half of Sephora’s growth, Cabanis said, with new space supplying the rest. Wines & Spirits grew 6 per cent, its third consecutive quarter of mid-single-digit growth, helped by a champagne recovery in Europe and improving momentum for Hennessy in China. Currency, a drag for five consecutive quarters, turned into a modest tailwind for revenue in the third quarter. The relief does not yet reach profits: Cabanis said the hit to margins would remain around 70 basis points in the second half before easing in 2027. LVMH bought back €2.3 billion of its own shares in the first nine months, and completed the sale of Marc Jacobs to WHP Global on September 1. Cycle, or something stickier? Both Arnault and Cabanis framed the slowdown as cyclical. Luxury goes through cycles like most sectors, Arnault told CNBC, and demand will return “when the timing is right and the elements are right”.  Cabanis added that trading in September was better than the quarterly average, including among Chinese customers.  Hermès and Kering both report next week, which will show whether LVMH’s China weakness is specific to its own houses or common across the sector. Further reading: Why isn’t LVMH’s return to growth exciting investors?