---
title: "Europe Sold Handbags and Sneakers to China, and Now the Money Is Gone"
description: "LVMH’s market value has collapsed, Adidas took its first loss in 30 years, and the bill for China dependence is arriving"
author: "Nate Ledger"
published: 2026-10-05T05:52:03.673Z
modified: 2026-10-05T09:11:53Z
url: https://rews.cc/a/europe-sold-handbags-and-sneakers-to-china-and-now-the-money-23c038
language: en
tags: ["china", "economy", "inflation", "boycott", "luxury", "europe", "business"]
publisher: "Rews (https://rews.cc)"
---

# Europe Sold Handbags and Sneakers to China, and Now the Money Is Gone

*LVMH’s market value has collapsed, Adidas took its first loss in 30 years, and the bill for China dependence is arriving*

By Nate Ledger · October 5, 2026 · https://rews.cc/a/europe-sold-handbags-and-sneakers-to-china-and-now-the-money-23c038

## In brief

- LVMH shares that topped 900 euros in 2023 have more than halved; the group has fallen from about 20th to around 80th by market value
- Swatch’s 2024 operating profit fell 75%, a collapse it blamed “entirely because of China”
- Adidas booked its first loss in 30 years in 2023 after the 2021 Xinjiang boycott; Greater China is now about 14% of sales
- H&M’s Shanghai flagship closed and it disappeared from major Chinese e-commerce searches, including Alibaba
- Volkswagen, Mercedes, BMW, French cognac makers and Denmark’s Vestas have also taken China-related hits

For a long time, the arrangement between Europe’s big companies and China was about as close to free money as global capitalism offers. Europe made the things — handbags, watches, sneakers, cars, cognac — and a fast-growing Chinese middle class bought them in ever-greater quantities. China was, in the phrase a recent *Chosun Ilbo* column uses, the goose that laid the golden egg. The column’s term for what happened next is less flattering: a “China Trap.”

Start with the biggest casualty. LVMH, the world’s largest luxury group, traded above 900 euros a share at its 2023 peak. Three years later the stock has lost more than half its value. By market capitalisation the company has slid from around the world’s top 20 to somewhere near 80th, and Bernard Arnault — who three years ago was rated the world’s richest man on a fortune approaching 300 trillion won — is now worth less than 200 trillion won and no longer makes the top ten. The direct cause, according to the column, is retreat in China: at its peak the Chinese market accounted for nearly a third of LVMH’s total sales, and recent results show that revenue falling sharply.

It is not just handbags. Swatch, Switzerland’s biggest watchmaker, saw operating profit plunge 75% in 2024 from a year earlier, and blamed the shortfall as being “entirely because of China.” There is a plain mechanism underneath all of this. China’s technology sector is advancing quickly, but its macroeconomy is weak, and consumption — the buying of consumer goods — is shrinking fast. If your business model is selling consumer goods into China, that is roughly your entire business model developing a leak.

## A boycott, a trade war and a lesson in substitutability

Then there is the demand problem that is not really a demand problem at all, but a permission problem. Adidas once got 23% of its total revenue from Greater China. In 2021 it commented on the human rights situation in Xinjiang, and Chinese consumers made it a target of a patriotic boycott. In 2023 the German sportswear company recorded its first loss in 30 years; Greater China has since shrivelled to about 14% of sales. H&M, which also spoke about the repression in Xinjiang, had its flagship store in Shanghai close and was scrubbed from search results on major Chinese e-commerce platforms including Alibaba. One day you are a brand; the next day you do not appear when someone types your name into the country’s biggest shop.

The column’s sharper point is about what Europe actually sells. European companies, it argues, have not kept ahead on innovation, and so they do not make products China cannot replace. They sell consumer goods — nice ones, prestigious ones, but substitutable ones. Combine that with a weak Chinese consumer, a boycott culture and a grinding trade war, and the concentration that once looked like a growth engine starts to look like a single point of failure. The Europeans, the column adds, were snobbish about China for years: they feared Russia because of the military threat, but treated distant China as no immediate danger, and underestimated its power right up until the moment the bill arrived.

The roll call keeps going. Germany’s industrial pride — Volkswagen, Mercedes-Benz and BMW — has been hit hard in the Chinese market. French cognac and brandy producers have taken heavy losses amid the trade dispute between the EU and China. And Denmark’s Vestas, a flagship of European green energy, went into China and, in the column’s telling, lost both its market and its technology there.

None of this required China to do anything exotic. It just required a market big enough to be irresistible, fickle enough to punish, and ambitious enough to make its own handbags eventually. The golden goose, it turns out, was never Europe’s goose. It just let Europe hold the eggs for a while.