In a massive upset, LVMH has lost its position as the most valued stock in the world. And the company that has dethroned the luxury giant is Hermes – the bag maker that LVMH once tried to take over back in 2010.
The development came as the biggest luxury company in Europe reported unexpected dip in the first quarter numbers.
LVMH missed the Q1 expectations with the American shoppers showing lesser interest in buying beauty products in wake of high inflation and tariff war.
Additionally, the company registered muted sales numbers in China as well. Dior, Louis Vuitton Tiffany & Co and beauty chain Sephora are some of the big brands owned by LVMH.
As per the CNN report, LVMH stocks dropped 7% in Monday trade. This decline led to LVMH’s market cap coming down to 246 billion euros as against 247 billion euros for Hermès.
LVMH was once seen as possible suitor for Hermes. Back in 2010, LVMH had shocked the luxury world when its billionaire boss Bernard Arnault acquired a huge stake in Birkin handbag maker company. However, the Hermes family fought back later forced Arnault to sell his stakes.
Morningstar’s senior equity analyst Jelena Sokolova told CNN that LVMH has a bigger exposure to the lower end of the luxury spectrum. On the other hand, Hermes boasts wealthier client base, which has allowed the bag maker to face the slowdown.
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