(Oct 12): LVMH’s biggest division posted a slump in sales last quarter as its key Louis Vuitton brand suffered from a boycott in China.

Organic revenue at the fashion and leather goods unit slid 5% in the third quarter, LVMH Moët Hennessy Louis Vuitton SE said in a statement on Monday. Analysts were expecting a drop of 1.57%.

The division was “affected in the third quarter by the slowdown in demand in China,” LVMH said.

Louis Vuitton sales suffered in July and August in China after the brand won a trademark dispute against Molly Tea, a local tea maker, Bloomberg reported last month. The victory drew a backlash from Chinese consumers there who deemed it unfair of the world’s largest luxury group to take the much smaller company to court.

LVMH shares have fallen by more than 40% this year, putting them on track for the worst annual performance since the global financial crisis in 2008. While much of the industry is feeling the effects of the downturn in demand, LVMH’s stock is the worst performer this year among major luxury groups, followed by rival Hermes International SCA.

Hopes for a rebound in the wider luxury industry this year have been undermined by sluggish Chinese demand, the prolonged conflict in the Middle East and weaker consumer confidence.

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