The French luxury group Hermès overtook its competitor LVMH on Tuesday and became a company with the world’s highest market capitalization and the most valuable luxury company in the world at the conclusion of the CAC 40, the leading index of the Paris Stock Exchange.
According to AFP calculations, the stock market assessment of Hermès achieved 248.6 billion euros, compared to 244.39 billion euros for the world’s largest luxury group LVMH.
This means that Hermès is the largest company in the CAC 40 and the third largest company in Europe, directly behind the German software manufacturer SAP and the Danish pharmaceutical Novo Nordisk. In addition, the house becomes the highest rated luxury company on the stock exchange worldwide.
This trend reversal took place after LVMH’s course on Tuesday (-7.82 percent during the trade). The market punished the company on the day after the publication of Analyst: Inside as displaced sales of the first quarter.
After a year 2024, which was affected by a weak demand from China, one of the main markets of the group, he also faces geopolitical uncertainties, especially in the United States. According to its own statements, the company is confronted with a “easy decline” of its sales and the increase in tariffs. Since the beginning of January, the LVMH shares have fallen by more than 23 percent. The figures published on Monday “confirmed a difficult start to 2025,” said Jefferies analyst: inside.
Hermès, on the other hand, is not affected by the crisis. Since January 1, the group has increased by almost 1.5 percent compared to the CAC 40, a remarkable progress in a more difficult context for the luxury sector overall after years of post-covid euphoria.
Fight for positioning
Despite a course of 2,355 euros per share, “the Hermès share continues to attract attention,” says Andréa Tuéni, head of market activities at Saxo Banque France. This is proof of the “trust that the markets have in the brand”, which is known worldwide for their iconic Kelly and Birkin bags and silk scarves.
Hermès has survived the decline in global demand for luxury goods better than his competition. This rescue owes the brand “its positioning in the ultra luxury segment with articles that are bought by a ‘super rich’ customer”, in contrast to “a positioning of LVMH, which is based exclusively for luxury,” explains Tuéni to AFP.
As a result, Hermès had managed to “achieve record results that continue to increase,” he says. The leather goods manufacturer published its turnover for the first quarter of 2025 on Thursday morning.
“The French luxury landscape is completely fragmented,” recalls Alexandre Baradez, head of the market analysis at IG France. “The rise of a wealthy middle class in China that had access to luxury goods that were generally quite affordable”, luxury groups such as Kering, the owner of the Gucci brand, and LVMH, which among other things belongs to Christian Dior and Louis Vuitton.
The rivalry goes back to the 2010s when LVMH surprisingly acquired Hermès and family members prompted to bundle their strength in Holding H51 in order to counter the access of billionaire Bernard Arnault. Hermès works with the logic of the article shortage. “The group relies on a high degree of creativity and craftsmanship at reasonable price increases,” state HSBC analyst: inside.
This positioning in an even more exclusive luxury segment helps the group to be better resistant to economic crises and “phases in which China had a difficult time” when LVMH and Kering had to take a blow because they were very exposed, said Baradez.
However, there are questions about the consequences of the trade war initiated by Donald Trump for the group, which is associated with a customs wave against its trading partners that has not been experienced since the 1930s.
“The super -rich”, the preferred clientele of Hermès, “are quite strongly exposed to the financial markets”, who have experienced significant turbulence in the past few weeks, warns Baradez.
This article originally appeared on fashionunited.fr and was translated using digital tool. He was then carefully edited.