Luxury spent 2025 shrinking, and the numbers said so out loud. Per Reuters on October 14, 2025, LVMH's sales returned to growth in the third quarter of 2025 as demand in China improved, with quarterly revenue of about €18.3 billion — still below what analysts wanted, but the first clean breath after four quarters of decline. Kering, meanwhile, kept bleeding: per the group's October 2025 filing, Gucci's third-quarter revenue landed around €1.3 billion, down roughly 14% on a comparable basis.
How bad was the 2025 correction, actually?
The shape of the year matters more than any single quarter. LVMH's fashion and leather goods division — the engine that houses Louis Vuitton and Dior — fell 9% in the first quarter of 2025, then 4% in the second, then just 2% in the third, per the group's quarterly releases. That deceleration of the decline is what analysts read as the correction moderating. Kering had no such glide path: Gucci's first-half 2025 revenue dropped about 26% as reported, per the company's July 2025 filing, while the house waited on its post-Alessandro-Michele, post-Sabato-De-Sarno reboot under Demna.
Why beauty kept winning while handbags didn't
Here's the quiet plot twist of 2025: while it-bags cooled, fragrance and beauty kept selling. The clearest evidence isn't a divisional sales line — it's a contract. In October 2025, Kering and L'Oréal announced a 50-year beauty license agreement under which L'Oréal will build and run beauty for Gucci and, through the deal, Kering's houses enter L'Oréal's orbit. Two of luxury's biggest groups effectively said the growth they believe in most is the €40 lipstick, not the €4,000 bag.
LVMH read the same room. Its Perfumes & Cosmetics division stayed one of the group's steadier performers through the year, even as fashion faltered. A downturn where lipstick holds and leather goods wobbles is an old pattern with a 2025 renewal date.
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What the reset means for what you'll see in stores
Fewer drop-everything logomania bets, for one. With fashion and leather goods — the highest-margin, most trend-sensitive category — under pressure at both groups, 2026 collections are being designed in a mood of consolidation: fewer debuts staged as stock-market events, more reliance on beauty counters and fragrance to hold revenue flat while couture-level fashion recalibrates.
And the creative-director musical chairs of 2025 — Jonathan Anderson at Dior, Matthieu Blazy at Chanel, Demna at Gucci — now reads less like restlessness and more like the only growth strategy left. Per Vogue's September 2025 coverage, a record 15 houses showed debut collections in a single season. Boards bought new designers because the old numbers stopped working.
Is the luxury slowdown over?
Not yet — but the curve is bending. LVMH's third quarter of 2025 marked a return to group-level growth, per Reuters, and China's improvement was the single biggest reason. Kering's recovery is further out, tied to how fast Demna's Gucci can find an audience. The full-year 2025 reports, due from both groups in early 2026, will confirm whether the fourth quarter kept the trend.
Which category held up best in 2025?
Beauty and fragrance outperformed fashion at both groups, which is precisely why Kering signed its half-century L'Oréal deal in October 2025. Small-ticket luxury — scent, makeup, skincare — behaves like an affordable indulgence in downturns. Handbags at €4,000 do not.