How did LVMH’s market value exceed US$500 billion? Bernard Arnault built the French luxury company into a global powerhouse but it was decades in the making, owning brands from Louis Vuitton to Hublot

Apr 26 , 2023

Bernard Arnault, billionaire and chairman of LVMH, has just witnessed his company’s market value exceed US$500 billion. Photo: Bloomberg

Before Bernard Arnault built LVMH into a luxury behemoth, he used the windfall from a bankrupt textile group that owned Christian Dior to buy a controlling stake in the company in the late 1980s

With 75 labels ranging from Dom Perignon to Louis Vuitton and Hublot, the French luxury giant has more than 5,600 stores worldwide and its stock price is expected to reach €1,000 next year

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.

Bernard Arnault, chairman and CEO of LVMH, speaks during a news conference in Paris, France, on January 26. Photo: Reuters

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 Hermès International S.A. 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 Moët Hennessy Louis Vuitton SE, as the company is formally known, climbed 0.3 per cent to €903.70 at 10:43am. Monday, valuing the company at €454 billion (US$500 billion).

French luxury

A Louis Vuitton luxury retail shop is seen in Times Square in Causeway Bay, Hong Kong. Photo: Winson Wong

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.

A floral tote bag in the window of the Dior luxury clothing boutique in central Paris, France, on April 11. Photo: Bloomberg

“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.”