For the first time since 2017! Luxury goods demand slows, LVMH falls out of Europe's top ten by market capitalization

According to Zhihu Finance APP, LVMH is about to lose its title as the highest-valued company in France and drop out of the top ten publicly-listed companies in Europe by market capitalization—a landmark reversal for the luxury goods giant that once led the European market during the post-pandemic boom. The stock fell 2.5% on Tuesday, bringing its market value down to €201 billion ($232 billion), slipping below L’Oréal. This shift marks the first time since 2017 that LVMH has fallen out of Europe’s top ten by market value.

"Those who claim that Europe is back are wrong; Europe has not returned: what LVMH tells us is that its most important growth engine—luxury goods—has stalled," said Vincent Juvyns, Chief Investment Strategist at ING in Brussels.

At its 2023 peak, LVMH was the highest-valued company in Europe, with its share price breaking above €900 per share. Since then, it has dropped by about 55%. Demand for luxury goods continues to weaken in China, its vital market, while recent Middle Eastern conflicts have further hit consumption at several key shopping hubs.

To make matters worse, LVMH’s most profitable brand, Louis Vuitton, recently faced a consumer boycott in China due to a trademark dispute with Jasmine Milky White, deepening the company’s woes in the country. Several brokerages have already downgraded the stock’s rating and target price.

The luxury group, controlled by billionaire Bernard Arnault, has seen its share price plunge by about 37% just this year, returning to levels seen during pandemic-era lockdowns when many of its stores worldwide were shuttered. This pullback is comparable in scale to the declines during the global financial crisis.

According to the Bloomberg Billionaires Index, Arnault dropped out of the world’s top ten richest individuals last week, leaving the ranking dominated by American billionaires, mainly from the tech industry.