LVMH's chief financial officer has for the first time acknowledged at an earnings conference that LV's lawsuit against Jasmine Naicha (Moli Nai Bai) did create a negative impact at the beginning of the quarter.
During the third quarter, overall demand from LVMH's Chinese clientele declined by 15%, according to disclosures.
In early July this year, the trademark infringement case filed by LV against Jasmine Naicha was publicly ruled upon. The court of first instance determined that the four-leaf floral graphic used by Jasmine Naicha in its brand identity and store decor infringed upon seven of LV's registered graphic trademarks, ordering Jasmine Naicha to cease infringement and pay a total of 10.3 million yuan in economic damages and reasonable legal expenses.
Subsequently, LV's reputation on Chinese social media platforms quickly took a turn.
At midday today, the BUG column visited an LV store located in Guangzhou Taikoo Hui shopping mall and observed no queue outside the store. A long-time customer of the store said that now, after making an appointment, there is basically no need to queue, a stark contrast to several years ago.
"Business has really gotten worse," an LV sales associate admitted, stating that after the Jasmine Naicha lawsuit incident, both store sales and personal performance were indeed affected, and this impact has been ongoing.
Some professionals in the secondhand luxury goods recycling industry also noted that prices of certain popular LV products once experienced a "nosedive" in the secondhand market, dropping by several thousand yuan.
According to the latest financial data disclosed by LVMH, in the third quarter of 2026, the Asian market excluding Japan, where China is located, was the only region where the group's organic revenue experienced negative growth during the quarter, with organic revenue declining 5% year-on-year. This market had grown 7% and 4% in the first and second quarters respectively, showing a trend of slowing growth quarter by quarter.
Winning the Lawsuit Yet Facing Public Backlash, Sales Staff Admit Business Has Worsened
After the verdict news spread, some consumers commented bluntly, "Patterns like four-leaf florals are very common in traditional Eastern motifs, so how did it become LV's?" Although LV won the first-instance ruling, it triggered a large wave of consumer resistance toward the brand on social platforms.
According to media reports, customer traffic at LV stores in multiple locations declined noticeably.
During the midday period today, the BUG column visited the LV store at Guangzhou Taikoo Hui shopping mall and observed no queue outside. On the ground floor of the store, only one sales associate stood at the entrance greeting customers, while several customers were browsing merchandise inside, with new customers occasionally entering.
On the surface, this store, the only LV location in Guangzhou's core commercial district, still maintained a certain level of foot traffic.
However, a sales associate admitted during conversation that after the Jasmine Naicha lawsuit incident, both store sales and personal performance were indeed affected. The associate did not disclose the specific extent of the impact.
A long-time customer of the store said, "Now after making an appointment, there is basically no need to queue." The customer recalled that several years ago, this LV store frequently required queuing, especially on weekends, holidays, or when popular styles were restocked. The queuing situation has now changed noticeably.
The BUG column also learned that after the lawsuit news emerged in July, prices of certain popular LV products in the secondhand market also experienced a "nosedive."
A professional in the luxury goods recycling industry said, "For example, the LV monogram baguette bag suddenly seemed like nobody wanted it. The store had inventory hoarded up, and it could originally sell for 12,000 to 13,000 yuan, but suddenly dropped by several thousand."
"LV's secondhand market was already declining, and combined with the reputation issues caused by the Jasmine Naicha incident, many customers at the time wanted to sell as early as possible, worried that prices would keep falling. Market volatility over the past few months has indeed been significant. It has basically stabilized now, but there has been no obvious recovery. The essence is that a large volume of supply flooded in, while customers willing to buy secondhand LV were instead holding off. Supply exceeded demand, and recycling prices were pulled down," the person said.
While demand-side pressure mounts, LV stores in certain regional markets in China are also undergoing a systematic retreat.
According to a previous tally by Sina Finance's "Guiquan" column, since the beginning of this year, LV has successively closed three key stores in southwestern China, including the Kunming Jinge Department Store Time Store, the Chengdu Tianfu International Airport Store, and the Guiyang Lixing Center Store. As of now, LV's store network in the five southwestern provinces has been cut by more than half from its peak, with only 3 stores still in operation.
On the evening of October 12 local time, at LVMH's third-quarter 2026 earnings conference, when asked about the impact of suing Jasmine Naicha in China, LVMH's chief financial officer Cecile Cabanis admitted, "It is difficult to precisely quantify the impact. But overall, it can be said that at least at the beginning of the quarter, the incident did have a negative impact."
According to disclosures, in the third quarter, overall demand from LVMH's Chinese clientele declined by 15%, with domestic consumption showing a double-digit decline and overseas consumption dropping by mid-single digits.
Chinese Clientele Demand Declines, Management Says "Price Cuts Are Not Advisable"
The shifting fortunes at terminal stores are more clearly reflected in LVMH's financial data. In the first half of 2026, LVMH achieved revenue of 38.644 billion euros, with organic growth of 2%, and net profit of 5.697 billion euros, essentially flat compared to the same period last year.
However, as the group's largest revenue source, the fashion and leather goods business declined 1% organically in the first half, with second-quarter growth of 1% falling below market expectations of 1.52%.
By the third quarter, the situation further deteriorated. During the reporting period, LVMH achieved revenue of 18.504 billion euros, with organic growth of only 1%, a marked pullback from 3% in the second quarter; the fashion and leather goods business saw organic revenue decline 5% year-on-year to 8.245 billion euros, becoming the only business segment among the group's main divisions to record negative growth.
What drew even more market attention was the overall performance of the Chinese clientele. Financial data showed that the Asian market excluding Japan, where China is located, was also the only region where the group recorded negative organic revenue growth during the quarter, with organic revenue declining 5% year-on-year. This market had grown 7% and 4% in the first and second quarters respectively, showing a trend of slowing growth quarter by quarter.
At the earnings conference, LVMH's chief financial officer Cabanis admitted that the slowdown in the fashion and leather goods segment was "mainly driven by the Chinese clientele," and for the first time directly linked the Jasmine Naicha lawsuit incident to performance.
This statement stands in sharp contrast to three months ago. At the second-quarter earnings conference in late July, when asked whether the lawsuit with Jasmine Naicha affected China performance, Cabanis emphasized, "Intellectual property is absolutely our core asset, and we will fully protect our brand. Not just in China, our team continuously and regularly handles trademark infringement in multiple countries around the world."
Nevertheless, LVMH management remains optimistic about the prospects of the Chinese market. Cabanis characterized the current weakening demand in the Chinese mainland market as "a cyclical phenomenon, not a structural shift," and stated that by the end of the third quarter and the beginning of the fourth quarter, the group's overall clientele performance had already improved relative to the quarterly average, with the Chinese clientele also showing some improvement.
Cabanis also made clear that LVMH would not stop investing in the Chinese market because of the Jasmine Naicha incident, but also believed that short-term measures such as price cuts were not advisable.
As of the close on October 13, LVMH's closing price was approximately 384.50 euros, with the stock down more than 40% year-to-date.
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