LVMH and the Mood of 2026: Fewer Handbags, More Champagne

If you want to know how the world’s wealthier consumers are feeling, you could read the latest forecasts.
Or you could just look at LVMH – the group behind Louis Vuitton, Dior, Moët & Chandon and a long list of other heavyweight luxury brands – and see what’s actually selling, and what isn’t.

LVMH has just given us a snapshot of the current mood. And it’s not quite what you’d expect.

Handbag sales have slowed down. The champagne hasn’t.

In the first quarter of 2026, LVMH reported €19.1 billion in revenue. On the face of it, nothing dramatic: growth is there, just not doing anything particularly exciting. Look underneath, though, and the picture gets more interesting.

The fashion and leather goods division – the bit that tends to dominate headlines – slipped slightly, down 2% on an organic basis.
Not a collapse, not even a wobble, but enough to catch the eye. This is the division that usually does the heavy lifting: Louis Vuitton, Dior, the whole glossy, logo-driven machine.

At the same time, wines and spirits grew, up around 5%. Champagne, cognac, the celebratory end of the portfolio – all ticking along rather nicely.

You’ve got a situation where people are hesitating over a £3,000 handbag… but still quite happy to open a bottle of something expensive. That’s not a coincidence.

Luxury, despite appearances, isn’t one market. It’s several.

There’s the kind you wear – visible, lasting, and very obviously a purchase. And there’s the kind you consume – fleeting, social, and easier to justify. Right now, those two are drifting slightly apart.

A handbag is a decision. It’s the moment you stop and ask whether now is the right time to treat yourself. That kind of purchase leans heavily on confidence – in income, in markets, in where things feel like they’re heading.

At the moment, confidence isn’t gone. But it isn’t racing ahead either. Rising mortgage costs and energy bills are starting to squeeze the more aspirational luxury buyer, while softer markets take a bit of the shine off spending at the top end too.

Then there’s geopolitical noise in the Middle East, which LVMH says shaved a percentage point off growth and hit fashion hardest in that region.
Chinese demand is still recovering, but more cautiously than before, and the post‑Covid “buy everything in sight” phase has clearly faded. Put that together, and it makes sense that the bigger, more committed purchases are the first to pause.

Champagne sits in a different category. It’s not a long‑term decision. It’s a short one. You don’t open a bottle because the economy looks optimistic. You open it because it’s someone’s birthday, or a deal’s just closed, or the table next to you ordered one and now water looks a bit dull.

It’s also easier to adjust without opting out entirely. You might go for something a bit less extravagant, but you don’t cancel the moment.

And crucially, it’s shared. A handbag is yours. A bottle belongs to the table. That makes it a much easier “yes”.

Cognac and champagne also sit inside rituals that don’t move much with the headlines – Chinese New Year, weddings, big events, even Formula 1 podiums now that Moët & Chandon is back in the spotlight. Those don’t get postponed just because the outlook feels a bit uncertain.

There’s another layer here as well.

Watches and jewellery are still growing, up about 7% in the quarter. Not spectacular, but steady enough to tell you something important.
The very top end of the market isn’t particularly worried. That part is still spending – just a little more selectively, and sometimes on things that feel more lasting.

Which leaves the middle of the luxury market doing the adjusting. Not walking away. Just editing. They’re still in the boutiques. Still at the beauty counters. Still going out. Just being more careful with the big, obvious statements.

None of this points to a dramatic downturn. LVMH isn’t flashing warning lights or talking about difficult conditions; the tone is calm, almost deliberately so. But the mix has shifted. And in a business like this, the mix tells you more than the headline ever will.

It shows you where confidence is holding up, where it’s softening, and how people are choosing to spend when they’re no longer quite as carefree as they were a year or two ago. For investors, that matters.

The Last Word

If the strongest luxury portfolio in the world is seeing its core category ease off, others won’t be immune. And if growth is coming from drinks, jewellery and experiences rather than big‑ticket fashion, that starts to show you where the more resilient parts of the market might sit for a while.
It’s not panic. It’s positioning. For everyone else, it’s a pretty clean take on 2026: people haven’t stopped spending, they haven’t shut their wallets and gone home; they’ve just become more selective about what they spend it on. The statement pieces are on pause. The shared moments aren’t.