adminNEW YORK. — LVMH’s market value surpassed US$500 billion, becoming the first European company to reach that milestone, thanks to booming sales of luxury goods in China and a strengthening euro.
The achievement comes less than two weeks after LVMH joined the ranks of the world’s 10 biggest companies, powered by a surge in first-quarter sales.
Rival Hermes International subsequently published its own strong numbers, reinforcing the view that China’s reopening from pandemic lockdowns is fuelling growth across the industry.
The company’s rising value has swelled the wealth of the world’s richest person, Bernard Arnault, who built LVMH into a global powerhouse through a series of acquisitions.
His fortune stands at almost US$212 billion, according to the Bloomberg Billionaires Index.
Shares of Paris-based LVMH Moet Hennessy Louis Vuitton SE, as the company is formally known, climbed 0.3 percent to €903.70 at 10:43 a.m. yesterday, valuing the company at €454 billion ($500 billion).
LVMH and its French luxury rivals are to the European stock market what Big Tech has been to the US: Dominant businesses whose growth holds up even as the economy waxes and wanes.
That’s evident in the global market value rankings, with a host of technology companies dominating the list, where LVMH has become the latest entrant taking 10th place.
“Luxury stocks embody what the equity market has best to offer at the moment: exposure to Chinese consumption, which continues to surprise on the rise, and robust margins thanks to their pricing power,” said Lilia Peytavin, European portfolio strategist at Goldman Sachs in Paris. “This differentiates Luxury from Tech, whose margins have been contracting for several quarters already.”
Demand has held up for LVMH products — Louis Vuitton handbags, Moet & Chandon Champagne and Christian Dior gowns among them — even as surging inflation and rising interest rates have threatened to tip the world into recession. — Bloomberg
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