After renewed Chinese demand boosted sales, the owner of Louis Vuitton Christian Dior and Tiffany became the first European company valued at over $500bn (£402bn).
LVMH, which is run by Bernard Arnault the richest man in the world, has exceeded the $500bn mark after the shares ticked 0.3pc up in Paris. Later, they dropped back down. LVMH is the first European company with a market capitalisation of this magnitude.
LVMH is now worth 30pc higher than at the beginning of 2023, following months of gains in share prices. LVMH has joined the top 10 companies in the world.
Chinese consumers’ spending has increased since December, when strict Covid-19 regulations were lifted. China is the largest luxury market in the world.
LVMH’s latest update, released earlier this month said that sales in Asia were up 17pc for the first three-month period of the year. The company attributed the increase to what it called a “significant recovery”. Around 80pc of LVMH’s Asian business comes from China, and Louis Vuitton has had a Beijing store since 1992.
LVMH is not the only luxury retailer to benefit from Chinese shoppers returning to their stores. Burberry, a rival luxury brand, reported “some very encouraging signs and a significant change in traffic” in its Chinese stores during January. Analysts predict that China’s reopening will boost demand for high-end apparel and accessories by up to 20pc this year.
Edouard Aubin, a Morgan Stanley analyst, said that China should be the industry’s main growth engine this year. We expect the brands at the top end of the luxury goods pyramid to gain the most.
Morgan Stanley stated that both Chinese and Korean consumers were “increasingly favoring brands with highest price points which they view status symbols while cutting spending on less expensive, fashion-oriented, or ‘aspirational brands’ favoured in the West”.