Core Insights - The luxury goods industry is experiencing a downturn, with major players like LVMH and Kering reporting significant declines in revenue and profits for the second quarter of 2025 [1][4][5] - The overall market sentiment has shifted, leading to a revised forecast for global luxury goods sales, now expected to decline by 2% to 5% in 2025 [1][4] Group 1: Company Performance - LVMH reported a 4% decline in revenue for Q2 2025, with operating profit down 15% and net profit down 22%, particularly affected by poor performance in its core fashion and leather goods segment [1] - Kering's Q2 revenue was €3.7 billion, a 15% year-on-year decline, with Gucci's sales down 26% for the sixth consecutive quarter, and net profit down 46% [1] - In contrast, Prada's Miu Miu saw a 40% increase in Q2 revenue, while Richemont exceeded market expectations with a 6% revenue growth in Q1 2026 [4] Group 2: Market Trends - The Japanese market has shown weak performance, with Kering's Asia-Pacific revenue down 21% and LVMH's revenue in Japan down 15% [5] - The luxury sector is witnessing a "layered" market dynamic, where some brands thrive while others struggle, indicating a divergence in performance across different companies [4] Group 3: Channel Restructuring - Many luxury brands are closing stores, with Kering planning to close 80 stores this fiscal year, focusing on optimizing their retail presence [7][9] - The strategy involves reducing the number of stores in lower-tier cities while concentrating resources in major urban centers to enhance brand visibility and consumer engagement [9][10] Group 4: Marketing Strategies - Luxury brands are adopting a more restrained marketing approach, focusing on quality over quantity, with Valentino and Hermès leading this trend by reducing the frequency of marketing events [11][12] - This shift aims to enhance brand perception and mitigate risks associated with excessive visibility and consumer backlash during economic downturns [12][13] Group 5: Conclusion - The luxury goods industry is undergoing a significant adjustment phase, with leading brands refocusing on core markets and adopting more subtle marketing strategies, moving away from aggressive growth tactics [13][14]