Major ClientsNarrow moat

LVMH has no customer concentration to disclose and a customer concentration problem all the same. Luxury's economics rest on a very small number of people: industry estimates consistently put a low single-digit percentage of customers at a large minority of sales, and for the most exclusive maisons the skew is more extreme still. Those clients are known individually to their stores, contacted personally, and shown pieces before they reach the shop floor¹.

Underneath them sits the group that has actually caused the recent slowdown. The aspirational customer — the person buying one item a year, often the entry-level product, frequently financing a stretch purchase — is the buyer LVMH priced further away from during the post-pandemic boom, and the buyer who has since stopped. The group's China exposure has its own root threat; what these pages add is that the weakness has been concentrated in a customer tier rather than a geography.

The other two customer groups barely resemble the first. Sephora's shoppers buy $30 beauty products in a mass-market environment and are counted in the tens of millions — a genuinely different business inside the same company, and one of the few places LVMH meets an ordinary consumer. And the wholesale accounts — department stores, multi-brand retailers, travel retail — are customers LVMH has been deliberately reducing for two decades in favour of owned stores.

Watch organic growth by division rather than by region. The division mix tells you which customer tier is spending, and in this cycle that has mattered more than which country they were spending in.