Hermès Up, LVMH Down - The Plot Twist No One Saw Coming
LVMH is now facing what can only be described as a billion-euro identity crisis. The numbers are brutal: since 2023, the group has lost a staggering €221 billion in market value. Its share price has been sliced nearly in half. And Bernard Arnault, the man who once wore the crown of the world’s richest person, has seen his fortune shrink from a record-breaking $231 billion to a “mere” $150billion. For a company that seemed unstoppable, it’s a dramatic comedown.
Cracks in the Crown Jewels
The troubles aren’t confined to the stock chart. The very pillars of LVMH’s empire are wobbling.
Dior, once the growth engine, is noticeably losing steam.
Moët Hennessy is suffering a serious hangover, battered by falling demand in both the US and China.
And the mighty Louis Vuitton, LVMH’s golden goose, is now catching flak for losing its identity in a sea of collaborations, logo mania, and inconsistent brand messaging.
Investors, known for turning a blind eye during boom times, are now growing restless. With over 75 brands in its sprawling portfolio, critics are asking if LVMH has simply gotten too big to manage and whether a dramatic portfolio “diet” might be in order.
Falling from the Top
If that wasn’t enough, LVMH has also been dethroned on the corporate leaderboard.
No longer among the Top 3 biggest companies in Europe.
No longer France’s most valuable company.
The new crown holder? Hermès, the quiet luxury rival that focuses on a single, impeccably-managed brand and has been reaping the rewards of a “less is more” strategy.
And for Bernard Arnault, it’s been a tough pill to swallow: from #1 to #9 on the global billionaires list in just a year.
The Succession Question Looms
As if the numbers weren’t alarming enough, the elephant in the (very expensive) room remains succession. Arnault extended the CEO retirement age to 85, effectively buying himself more time at the top. But succession speculation is reaching fever pitch. Despite several Arnault heirs already holding executive positions within LVMH, no clear successor has been named.
A Midlife Crisis or the End of an Era?
For years, LVMH symbolized the pinnacle of aspirational luxury. But with sliding sales, investor pressure, and a competitor like Hermès lapping them in market value, many are wondering: is this just a temporary stumble or the start of a long-term decline?
One thing’s for sure: luxury isn’t what it used to be and LVMH is finding that out the hard way.