Louis Vuitton owner LVMH’s value dropped to $277.4 billion while Birkin bag maker Hermes’s market cap soared to $280 billion on Tuesday
The world’s largest luxury conglomerate, LVMH, which owns Louis Vuitton, was briefly dethroned by rival Hermes, maker of Birkin bags, on Tuesday as its shares tumbled 7.8% after reporting a 3% drop in Q1 sales.
The decline wiped out over $21 billion in LVMH’s market cap, valuing it at around $277.4 billion, while Hermes maintained a 0.2% gain with a value above $280 billion.
Shares of other luxury players, like Gucci-owner Kering and Burberry, also took hits yesterday, losing 5.2% and 4.6%, respectively.
LVMH faced weaker demand in the US and China, with wine and spirits revenue falling 9%. Its key fashion and leather division slipped 5%.
It experienced 2% growth in its home base, Europe.
Once Europe’s most valuable firm, LVMH has shed 45% of its value since its 2023 peak.
Analysts from Citi and BofA flagged weak global sales in America and Asia, trade tensions, and tariff uncertainty as the major factors behind its slow sales.
They further add that it’s hard to see a short-term rebound in the luxury sector, with global uncertainty and trade tensions still looming.
Meanwhile, Hermes has weathered the luxury sector downturn by catering to the ultra-wealthy and keeping its iconic handbags scarce and exclusive, thereby raising their value. Its Birkin and Kelly bags start at nearly $11,500 and can resell for hundreds of thousands of dollars.