LVMH Tops $430B Market Cap

LVMH’s share price rose to over 800 euros on Tuesday (Jan. 17).

The fashion and luxury goods group, which is listed on the Euronext Paris exchange, briefly traded at over 800 euros (roughly $863) a share, boosting the company’s market capitalization to 400 billion euros ($431.5 billion) for the first time, Reuters reported.

The new record cements LVMH’s position as Europe’s most valuable business and will likely give Bernard Arnault, the firm’s CEO and a significant shareholder in LVMH, an even greater lead as the world’s richest person.

Following Elon Musk’s record-breaking loss of net worth, which has tumbled with the market price of Tesla, Arnault has held the title thanks to his luxury fashion empire that includes LVMH shares and a majority stake in Christian Dior.

As PYMNTS reported in April, luxury retailers proved remarkably resilient in 2022, even as other retail categories suffered declining fortunes. As reflected in Tuesday’s strong stock market performance, a stream of robust sales results has seen the likes of LVMH and Hermes report increasing earnings despite a wider economic slowdown.

LVMH’s latest milestone could well reflect investors’ anticipation of a wave of luxury spending as wealthy Chinese shoppers make their return to international shopping destinations after months of intense domestic lockdowns.

A surge in post-lockdown travel is already showing up in data from Trip.com, which said at the end of last year that outbound bookings from China hit levels not seen since before the pandemic.

On Dec 27, when Chinese authorities announced the decision to reopen the country’s borders, Trip.com reported a 254% increase in mainland China’s outbound flight bookings compared to the previous day.

Flights to Singapore, South Korea, Hong Kong, Japan and Thailand seem to have fueled the travel boom, making them the top five tourist destinations, with bookings for long-haul flights to the U.K, the U.S. and Australia also surging.

While luxury brands like LVMH will certainly enjoy the release of pent-up Chinese spending power for the moment, in the long run, further gains may be harder to achieve. Whether the luxury market can maintain its strong performance is yet to be seen.

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