Hermès surpassed LVMH in market value on Tuesday (15), marking a symbolic turn in the dispute between two of the largest powers in the luxury sector. The coveted Birkin bag manufacturer reached € 243.65 billion (R $ 1.618 trillion) in market value, momentarily exceeding € 243.44 billion (R $ 1.616 trillion) of LVMH.
With this, Hermès has become the most valuable company in the French index CAC 40 and the third largest in Europe, behind only SAP software developer and the new pharmacist Nordisk.
The change occurs after LVMH rolls up to 8.4% on the Paris Stock Exchange, in reaction to disappointing results in the first quarter, with deceleration of sales in China and the US, as well as fears of a trade war.
“In uncertainty environments, investors seek quality and safety – and in the luxury sector, Hermès represents it,” said Jelena Sokolova, an analyst at Morningstar. “LVMH is a little more cyclical than Hermès.”
The appreciation confirms Hermès’s strategy to maintain its independence. In 2010, Bernard Arnault, a LVMH controller and then Europe’s largest billionaire, revealed that he silently acquired a significant slice from Hermès – a hostile onslaught that led members of the founding family to join control and, years later, force Arnault to sell his participation.
LVMH, owner of brands such as Christian Dior and Tiffany & Co., had € 84.7 billion sales and operating profit of € 19.6 billion by 2024. Hermès, in turn, recorded € 15.2 billion in revenue and € 6.2 billion operating profit in the same period.
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Although smaller in revenue, Hermès has resisted better at the deceleration of the luxury sector by focusing on a ultra -ulthrical audience and maintaining a controlled scarcity model that feeds the desire for items such as Birkin and Kelly bags. These models can cost about € 10,000 in Paris and reach much higher values in the resale market.
Founded in 1837 as a harness manufacturer, Hermès has strong pricing power and waiting lists for its products. “The company is seen as more resilient in uncertain times – and that is exactly the current scenario,” said Sokolova.
Another factor that can weigh on LVMH, according to analysts, is the “conglomerate discount”, as brands such as Sephora operate with inferior margins than the group’s main brand, Louis Vuitton.
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On Monday, LVMH reported below expected results in its main fashion segment and leather items. Hermès will publicize its quarterly data on Thursday.
Although Bernard Arnault usually leads billionaire rankings – currently occupies the fifth position on Bloomberg’s list – the Hermès family, now under the command of sixth generation Axel Dumas, is considered the richest in Europe, with an estimated $ 171 billion fortune in December.
In February, Hermès’s market value briefly exceeded € 300 billion, but global commercial tensions since then impacted the luxury sector as a whole.
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