First time since 2017! Demand for luxury goods is sluggish, and LVMH falls out of the top ten in European market capitalization

The Zhitong Finance App learned that LVMH is about to lose its crown as the company with the highest market capitalization in France and fall out of the top ten European listed companies by market capitalization — a landmark reversal for the luxury goods giant that led the European market during the post-pandemic boom period. The stock fell 2.5% on Tuesday and its market capitalization fell to 2010 billion euros ($232 billion), falling below L'Oréal. This change brought LVMH out of the top ten in European market capitalization for the first time since 2017.

“Those who claim that Europe has made a comeback are wrong; Europe is not coming back: what LVMH tells us is that its main growth engine — luxury goods — has failed,” said Vincent Juvyns, chief investment strategist at Dutch International Group in Brussels.

LVMH was once the company with the highest market capitalization in Europe when it peaked in 2023. At that time, the stock price exceeded 900 euros per share, and since then it has fallen by a cumulative total of about 55%. Demand for luxury goods continues to weaken in its critical Chinese market, and the recent conflict in the Middle East has impacted consumption in several key shopping centers.

To make matters worse, Louis Vuitton (Louis Vuitton), the most profitable brand under LVMH, recently faced consumer boycotts in China due to a trademark dispute with Jasmine Milk White, further deepening its plight in this country. A number of brokerage firms have downgraded the stock's rating and target price.

The luxury goods group, controlled by billionaire Bernard Arnault (Bernard Arnault), has plummeted its stock price by about 37% this year alone, back to the level when many countries were blocked during the pandemic and many stores around the world closed. The magnitude of this round of retracement is already comparable to the decline during the global financial crisis.

According to the Bloomberg Billionaires Index, Arnault dropped out of the top ten richest people in the world last week, making this list dominated by the faces of pure American millionaires and mainly tech billionaires.