Luxury brand LVMH falls out of Europe's top 10 listed firms

Shares have fallen 55% since 2023 peak

LVMH is poised to lose its crown as France’s most valuable company and drop out of Europe’s top 10 listed firms, a symbolic reversal for the luxury giant that led the region’s market during the post-pandemic boom. Picture: Yui Mok/PA 

LVMH is poised to lose its crown as France’s most valuable company and drop out of Europe’s top 10 listed firms, a symbolic reversal for the luxury giant that led the region’s market during the post-pandemic boom.

The stock fell 2.5% on Tuesday, cutting its market capitalization to €201bn and putting it just under L’Oreal. The move knocks LVMH out of Europe’s top 10 for the first time since 2017.

“Those who claim that Europe is back are wrong, Europe is not back: what LVMH tells us is that its main growth engine, luxury, is broken,” said Vincent Juvyns, chief investment strategist at ING in Brussels.

LVMH Moët Hennessy Louis Vuitton SE, Europe’s most valuable company at its 2023 peak when shares topped €900 apiece, has fallen about 55% since. Luxury demand has faded in the crucial Chinese market, while conflict in the Middle East has more recently hit spending in key shopping hubs.

Adding to the pressure, Louis Vuitton, LVMH’s most profitable label, has recently faced a consumer backlash in China over a trademark dispute with a local tea company, deepening its challenges in the country. Several brokers have cut ratings and price targets.

The conglomerate controlled by billionaire Bernard Arnault has seen its shares plunge about 37% this year alone, bringing them back to pandemic-era levels when lockdowns shut down many stores across the world. The drawdown is now of a similar magnitude to the drop experienced during the global financial crisis.

According to the Bloomberg Billionaires index, Arnault last week fell out of the top 10 list of the world’s biggest fortunes, leaving an all-American roster of mostly tech billionaires to dominate the rankings.

Arnault’s net worth fell to $143 billion, according to the Bloomberg Billionaires Index, pulling the LVMH founder below Warren Buffett, the 96-year-old philanthropist and chairman of Berkshire Hathaway.

Elon Musk leads the list by a long shot with a $918.8 billion fortune, followed by tech company entrepreneurs including Larry Page, Jeff Bezos, Sergey Brin and Michael Dell. It’s the first time since the wealth index’s 2012 launch that all the top 10 spots were held by Americans.

Succession is among the biggest issues swirling around Arnault and his five children from two marriages who all work for the luxury company. For the first time, they all spoke at a shareholders’ meeting in April when Arnault dodged a question about who would replace him as chief executive officer.

Bloomberg