The 20% drop in LVMH shares over the past six months suggests luxury companies may soon be unable to rely on the very wealthy to maintain sales as consumers start to save, writes Business Insider.

The decline comes amid a general tightening of financial conditions and a refusal of consumers to purchase expensive luxury goods.

LVMH shares fell to €675 after the company reported weaker-than-expected quarterly revenue growth of just 9% for the quarter, compared with 17% growth in the previous quarter. At the same time, due to the decline in the luxury goods industry, the value of the 7 largest European companies in this sector decreased by $245 billion.

Experts say this marks the end of the global luxury bubble, as LVMH is a very well-run business and investors are accustomed to seeing its revenue grow by double digits.

Experts foresee that luxury brands that previously enjoyed a reputation for being recession-resistant will now be unable to rely on high-income consumers, largely due to economic difficulties in China in 2023. The Chinese used to be the main consumers of luxury goods produced in the US and Europe, but China faces many economic problems.

Americans’ spending habits are also expected to change: the savings they accumulated during the pandemic are coming to an end.