Fashion giants on both sides of the Atlantic have underestimated the Chinese shopper at their own peril.
Nike and French luxury goods maker LVMH Moët Hennessy Louis Vuitton have let their product lines in China go stale, with the amount of revenue they take from the Asian nation tumbling in recent years.
Both stocks have paid the price. Nike shares have plummeted 46% this year, with the nadir so far coming when they were delisted from the S&P 100 large-cap index last month. LVMH remains one of Europe's biggest companies by total market capitalization, but it's down 41% in 2026.
The retailers sell different sorts of products to different sorts of consumers. But one thing they have in common is their struggles in China.
Nike's footwear revenue for the region fell 26% from a year ago, while apparel revenue dropped 27%, according to a first-quarter earnings report published last week. LVMH's revenue for Asia excluding Japan has crept lower over the past year.
Some of that is down to factors outside the retailers' control. China's real-estate crisis has tanked property values, making the country's middle class much less willing to dip into its pockets.
But both Nike and LVMH have also failed to give their Chinese customers much that's fresh or new, and sales have slumped as a result.
"The consumer has moved on," Piper Sandler analyst Anna Andreeva tells Barron's, noting that the likes of On and Hoka have done well in China even as Nike struggles there.
Adidas has been specifically designing products for China for years but Nike "is just starting that initiative," she adds. "They're so late to the game... Not having a localized assortment has hurt them."
It's a similar story for LVMH.
"Chinese consumers have become much more picky in what they want... They want to see newness, they want to see heritage," Deutsche Bank analyst Adam Cochrane tells Barron's. "Just selling the same old products isn't working."
"China has been central to Nike for 45 years, and it will continue to be," a Nike spokesperson told Barron's, adding that the company has recently hired a VP of Local Product Creation dedicated to "rebuilding brand health" there.
LVMH declined to comment. The luxury goods maker is likely to update investors on the state of its China business on Monday, when it is set to report third-quarter revenue.
Cochrane thinks LVMH appointing Jonathan Anderson as creative director of Dior could help it win back Chinese shoppers. Shares could rally 20% to 30% if Dior sales recover, even if the broader Chinese economy doesn't pick up, he adds.
Still, investors will need some evidence that China sales have bottomed out before they load up on shares of Nike and LVMH.
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