Louis Vuitton won its $1.5 million fight with a beloved Chinese tea chain. The backlash may have cost it hundreds more

The disagreement between luxury French brand Louis Vuitton and Chinese tea chain Molly Tea over the design of a four-petaled logo sparked a backlash that may have cost the fashion house additional millions. The French luxury house secured a $1.5 million judgment against Molly Tea in June 2025, but the outcome sparked negative reactions in China, potentially impacting LVMH's revenue.

Sales at LVMH’s fashion and leather goods division, which includes Louis Vuitton, fell to €8.25 billion in the third quarter of 2025 from €8.50 billion a year earlier, according to LVMH's earnings report. Stripping out currency swings and acquisitions, sales declined by 5%, with Chinese shoppers pulling back. Luca Solca, managing director of luxury goods at Bernstein, estimated the Molly Tea backlash accounted for 2 to 3 percentage points of that decline.

LVMH CFO Cecile Cabanis noted Molly Tea's impact was likely negative, though difficult to quantify. The dispute adds to LVMH's struggles in China, where luxury spending has weakened. The Asia excluding Japan category, which accounts for 27% of LVMH's revenue, saw a 5% decline in the third quarter compared to a growth of 4% in the second quarter.

In contrast, sales in the U.S. grew by 5% in the same period. The controversy began when Louis Vuitton sued Molly Tea in May 2025, claiming the milk tea chain's logo infringed on seven of the French brand's registered trademarks. A Chinese court ruled in favor of Louis Vuitton on June 29, ordering Molly Tea to stop using the design and pay $1.5 million in damages.

The ruling sparked outrage, with some Chinese social media users questioning the infringement and accusing Louis Vuitton of monopolizing ancient Chinese patterns. Despite the backlash, LVMH and Molly Tea have not commented on the matter. Chinese shoppers are reportedly pulling back from luxury brands, with LVMH's fashion and leather goods division experiencing a 5% drop in global organic sales in the third quarter of 2025, largely driven by the Chinese clientele.