LVMH CEO Bernard Arnault has critically commented on the French government during a hearing in the French Senate. In his speech, he explained that it is “very bad for the state to interfere in the management of private companies”. This statement was made in response to President Emmanuel Macron’s recent calls to economic patriotism.
The hearing was part of a more comprehensive assessment of state support for large companies. Arnault emphasized that the interference of the state in strategic decisions of companies in the past rarely led to good results: “In general, this leads to disasters,” said the top manager. He added that LVMH was “perhaps the most patriotic company in France”, with solid roots in the French economy and culture.
‘The tax increase could drive out the luxury industry from France’
LVMH – owner of cult brands such as Louis Vuitton, Dior, Moët & Chandon and Hennessy – had already critically commented on new tax proposals in the French budget for 2025 at the beginning of the year. Among other things, it is about increasing profit tax for large companies. Arnault fears that such measures will initiate companies to shift production facilities to countries with cheaper economic conditions.
The United States have become particularly attractive in this regard, especially under the investment climate, which is promoted to re -election by Donald Trump’s election campaign. LVMH now has three Louis Vuitton production facilities in the USA, including one in Texas. However, Arnault emphasized that this was not a new phenomenon: “We have been producing in the United States since 1989 – there is nothing new under the sun.” According to his statement, the American customs regulations offer significant advantages for locally produced goods.
Fashion as a global industry
Arnault’s comments touch a wider area of tension in the luxury industry: How do companies remain loyal to their national roots in an industry that increasingly acts globally? The French fashion industry, which is often seen as a cultural heritage, is also powered by international demand, global production and complex supply chains.
François-Henri Pinault, CEO des competitor Kering-parent company of Gucci, Yves Saint Laurent and Balenciaga-joined this realistic view. During an earlier hearing, he said: “It is no secret that Gucci produces Italian leather bags from Texas.”
Patriotism versus pragmatism
The discussion underlines the growing tension between national politics and the reality of an international market. While political managers are pushing for economic patriotism, large luxury groups continue to optimize their production and investments worldwide. This provides political decision -makers: inside, companies and consumers: Inside a difficult task: to remain true to the French heritage without losing competitiveness on the world stage.
Such debates are anything but theoretical for the French luxury industry – which is responsible for exports in billions in billions and hundreds of thousands of jobs. The outcome of these debates can be decisive for the course of some of the most influential fashion houses in the world.
This article was used with digital tools translated.
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