Chinese Design Booms While Luxury Spending in China Falls

Chinese designers opened first Shanghai stores in 2026, in the same season LVMH’s fashion division posted a 5% sales drop on weaker demand in China. The shows looked confident. The receipts did not.

Local labels now sell heritage, mall shops and celebrity T-shirts into a luxury market that has been shrinking for two years. Paris still needs China. China is no longer spending as if it does.

LVMH Fashion Sales Fell 5% as China Slowed

On October 12, LVMH said fashion and leather goods sales fell 5% in the third quarter, to €8,245 million (about $9.2 billion). The group’s own release blamed a less buoyant environment in China, while the United States, Europe and Japan still grew.

The fashion drop reversed a fragile repair. Organic sales in that division were down 2% in the first quarter, then up 1% in the second, the first green quarter after a long slide. The third quarter gave that back. Over nine months, fashion and leather goods brought in €26.39 billion, down 2% organically and 4% as reported.

Group revenue still rose. Third-quarter sales were €18.5 billion, up 1% organically. Nine-month revenue was €57.1 billion, up 2% organically and down 2% as reported. Watches and jewelry and Sephora carried the quarter. Fashion, the division that made China famous for handbags, did not.

LVMH IN THE THIRD QUARTER

Cécile Cabanis, LVMH’s chief financial officer, told analysts the Chinese clientele was down by a mid-teens percentage. She described a feel-good factor that deteriorated at the very start of the quarter. Louis Vuitton sat just below the division’s -5%. Christian Dior was flat. Loro Piana and Rimowa ran ahead.

Sephora, inside selective retailing, kept gaining share and added several C-beauty brands to its exclusive launches. The group that is losing fashion sales in China is still happy to sell Chinese beauty in its own stores.

Shoppers Moved Their Money Into Resale

Bain & Company’s China Personal Luxury Report, released on January 29, 2026, found the mainland market contracted 3% to 5% in 2025. That was milder than Bain’s 17% to 19% fall for 2024, and demand began to improve in the third quarter of 2025. It was still a second down year.

Fashion did worse than the headline. Leather did worse than fashion. The money that still moved went into skin care, pre-owned bags and names that feel local.

CHINA PERSONAL LUXURY IN 2025

• The market: Mainland personal luxury goods fell 3% to 5%, after a 17% to 19% drop in 2024, Bain found.
• Fashion and bags: Fashion declined 5% to 8%; leather goods declined 8% to 11%, as price rises met thin newness.
• What held: Beauty rebounded 4% to 7%; watches fell 14% to 17%; jewelry was down 0% to 5%.
• The sideline: Secondhand luxury grew 15% to 20% and stayed under 10% of the primary market; 65% of Chinese luxury spending happened on the mainland, 35% abroad.

Elle Yang, a Bain partner, said the secondhand market is becoming a complementary pillar as shoppers change how they think about luxury. Fflur Roberts, head of luxury goods at Euromonitor International, said weaker confidence, slower growth and price sensitivity are weighing on discretionary spending after more than a decade in which China drove global luxury growth.

Domestic brands, she said, are giving shoppers more alternatives to the old international houses. Bain’s report placed those local gains mainly in beauty and in selected personal-luxury categories, helped by local supply chains and prices Western houses no longer match. The broader market, Bain still found, is largely led by Western brands. Share is leaking. The lead has not flipped.

A Dog T-Shirt and a $1 Million Label

The new Chinese design story is easier to see than to add up. Mark Gong, 28, can name the minute his label changed. At 3pm on February 24, 2025, Jennie of Blackpink was photographed in his dog-print T-shirt, six dachshunds in pearl necklaces.

That was crazy, I was freaking out.

Mark Gong, founder, Markgong

His team ordered 500 extra pieces, then 2,000 after the pre-orders vanished the same afternoon. The shirt has since sold about 30,000 units. He also dressed Lisa in a tuxedo dress for the 2025 Oscars. Magazine editorials, he argues, do not move stock. A paparazzi photograph does.

Gong studied at Parsons in New York, founded the brand there in 2018 and moved it home in 2020. Annual revenue sits around $1 million. Direct-to-consumer sales are 60% to 70%. T-shirts are about 35%. The company has around 17 full-time staff and six freelancers. In August he opened a first flagship in a Shanghai mall with the incubator Labelhood, plus a Tmall shop, to show the puffy dresses and embroidery that do not sell themselves online.

If you are a designer here in China, he said, you are not just a designer, you are a business person. A million-dollar year with a mall shop is a real company. It is also a rounding error next to LVMH’s €8,245 million fashion quarter. That gap is the boom that fashion week can photograph and a luxury earnings call cannot feel.

Samuel Gui Yang, founded in 2015, opened a 1,300-square-foot first store on Julu Road, in an Art Deco residential building across from the Shanghai Writers’ Association, with a sunken alcove and a mezzanine. Labelhood operates it. The brand has 34 stockists in China and four or five in the rest of the world. Pronounce, the label of his Central Saint Martins classmate Yushan Li and her partner Jun Zhou, sits next door and marked 10 years with a Shanghai pre-collection after years of showing on the Milan menswear calendar.

Labelhood Turns Shows Into Shops

Giovanni Pungetti, former chief executive of OTB Group Greater China, who has been based in Shanghai for nine years, puts the wholesale ceiling in blunt terms: no more than 25 high-level shops, including SKP in Beijing and B1ock, a 10-floor department store in Hangzhou. Malls are hard. Online, beyond Taobao and Tmall, is thin. The second step for this generation, he said, is waiting on doors that do not exist.

Labelhood is the workaround. Tasha Liu co-founded the platform, now in its 22nd season, as a show schedule, a retail operator and a matchmaker for young Chinese labels. For the October round of Shanghai Fashion Week it ran a festival, LABELfitHOOD, from October 9 to 15, and treated the store as the point of the week, not the afterthought.

THE INCUBATOR’S RETAIL MOVE

• Own shops: Labelhood lists Shanghai and Shenzhen shop addresses across Jing’an, Xuhui and Qianhai, including a menswear space on Julu Road and a house format.
• Designer flags: It helped Mark Gong into a mall flagship, opened Samuel Gui Yang’s first store, and has been behind shops for Shushu/Tong, Short Sentence and Yangkehan.
• The bet: Olivia Chen, co-founder of consultancy 2034, said a store lets a brand keep control of distribution and get closer to the people who actually buy the clothes.

Yang has been showing off-schedule in Shanghai for several seasons and said the local customer base is growing step by step because the brand gives the region time and love. Julio Ng, Chen’s partner at 2034, separates sales from a healthy business: the cost of reaching customers, distribution terms, inventory and margins all matter. Repeat custom matters more than a viral season.

Blake Abbie, editor-in-chief of A Magazine Curated By, said most of the growth in China’s design industry has happened only in the last 15 years, and that proximity to factories lets fashion exist at more price points than emerging brands in Europe or the United States can touch. Cheap production is the quiet advantage. It does not, on its own, build a house with 200 doors.

What Guochao Looks Like on the Runway

Guochao, the turn toward Chinese heritage in contemporary clothes, dates to the late 2010s and is now ordinary on Shanghai schedules. Qipao florals and pankou frog buttons show up without apology. Designers who once borrowed a European silhouette now mine a legend, a trade route or a jacket that already had a name at home.

Hemu opened the week with Silk Road silks cut into current shapes. Pronounce’s pre-fall 2027 show, Through Her Eyes, used Eastern dress as proportion rather than costume, mixed ages on the runway, and closed with Dr. Qin Huilan, a retired Shanghai physician who had already walked for Miu Miu in Paris. Li and Zhou said they felt more ready to put traditional Chinese styles in fine fabrics on a runway they had once treated as too loaded.

Yang’s spring 2027 collection, The Green Snake, took the White Snake legend through the color of early-1990s Hong Kong cinema. International clients, he said, have grown less nervous about Chinese aesthetics.

Maybe in the beginning there was a slight hesitation, but I think over time we have identified a certain type of client and some people really are drawn to it.

Samuel Gui Yang, designer, on the SS27 collection

Roberts at Euromonitor said heritage is how local brands compete: it speaks to the Chinese customer first, then travels if the clothes hold up. Visitors to Shanghai Fashion Week still arrive expecting copycat product and leave with original pieces, which tells you the old factory stigma is the first wall these labels have to clear. A neo-Chinese “Living Heritage” exhibition ran October 11 to 13 at the Shanghai History Museum. The city’s own account promoted a Fashion Weekend at Xintiandi through October 25, turning the calendar into a public market. The argument on the ground is about color and cut. It is not, yet, about replacing Louis Vuitton.

Kering Bought Into a 200-Store Shanghai House

The capital move that does show up on a Western ledger is not a dachshund T-shirt. It is Icicle. Ye Shouzeng and Shawna Tao founded the Shanghai house in 1997 around natural fabrics and a quiet, Eastern-inflected cut. It now runs more than 200 stores, with flagships in Beijing, Shanghai and Paris, and a design studio in both cities. Bénédicte Laloux has led the Paris women’s show studio since 2013.

On April 16, 2026, Kering took a minority stake in Icicle’s parent, ICCF, through a new House of Wonders program meant to back houses with cultural weight outside the old European core. The French group said the money would support Icicle’s foreign stores and new categories, including bags and shoes. On September 7, Icicle named Sabato De Sarno, Gucci’s creative director from 2023 to 2025, as creative director of womenswear, menswear, accessories and eyewear. His first collection is due for fall/winter 2027, in the brand’s 30th year.

We believe this vision can only be realised by combining creative talent from around the world with Icicle’s deep cultural roots and industrial capabilities in China.

Ye Shouzeng, CEO and co-founder, Icicle

THE EASTWARD HIRE LIST

1. 1997: Icicle is founded in Shanghai by Ye Shouzeng and Shawna Tao.
2. April 16, 2026: Kering acquires a minority stake in ICCF to back Icicle’s next phase.
3. September 7, 2026: Sabato De Sarno, last at Gucci, is named Icicle creative director.
4. October 12, 2026: LVMH reports the fashion division’s 5% third-quarter drop and a mid-teens fall in Chinese clientele.

He is not alone in taking an Asian paycheck. Kim Jones is working with Bosideng’s Areal line. Kris van Assche partnered with Anta. Clare Waight Keller went to Uniqlo and Francesco Risso to GU, both under Fast Retailing. Daniel Fletcher joined Mithridate. Jonathan Lee, a Hong Kong-based consultant, said it is no longer a given that a Western designer will work in a European house. Maybe someone from Asia will take you.

David Siwicki, a Paris PR, has added Oude Waag in Shanghai, Kartik Research in New Delhi and Amomento in Seoul to his roster because, he said, style in Asia is already changing how the rest of fashion thinks. Julio Ng said building internationally known houses beside Comme des Garçons and Wooyoungmi will take time, but Asian firms can now hire global talent, make the clothes and reach the customer from the same base. Influence, in that reading, is no longer a European exclusive. It is also not yet a Chinese replacement for LVMH.

Twenty-Five Shops for an Entire Scene

Shanghai Fashion Week still struggles to pull the same editors and buyers who treat Paris as compulsory. Distance, language, airfares and a calendar that does not line up with Tokyo or Seoul all get named. Lee said closer dates across those cities would bring more buyers. Political weather between the countries makes that alignment unlikely. Abbie called it a huge missed opportunity. Pronounce already solved part of the problem by showing in Milan. Most of the new Shanghai names have not.

Roberts said Western brands will still work in China, in a pickier market that asks what a premium is for. Louis Vuitton, Dior, Loro Piana and Tiffany & Co. have opened new flagships in Tier 1 cities and pulled back in some Tier 2 and Tier 3 locations. Our Legacy, a newer foreign label, went the other way and opened a local-feeling shop with Dongliang in Shanghai. Chinese shoppers, Roberts said, now rank quality, individuality and personal relevance above logo recognition.

Shanghai doesn’t need to become the new Paris. It needs to become the new Shanghai. For me, it’s already the center of something, but they need to find their own way to develop the local fashion culture.

Giovanni Pungetti, former CEO, OTB Group Greater China

That way currently runs through Labelhood’s doors, a handful of department stores, Tmall, and one scaled house, Icicle, that could afford Gucci’s last designer because it already had 200 shops and a French shareholder. Mark Gong’s dog T-shirt and Yang’s Julu Road alcove are the other end of the same sentence: a design scene that has never had more to show, selling into a luxury customer who has never been harder to close.