LVMH becomes the first European company to be worth $500bn

Economy
By Liam

Luxury goods giant LVMH becomes the first European company to be valued at $500 billion

By Leah Montebello for The Daily Mail

published: | Updated:

LVMH has become the first European company to reach a market value of $500bn (£401bn) as luxury goods defy low cost of living.

The milestone came after shares on the Paris Stock Exchange rose 0.3 percent to €903.7, making the company the tenth-largest company in the world, ahead of Visa and just behind Tesla.

The owner of Christian Dior and Tiffany is the only European name in the world’s top 10 companies by market value, a list dominated by US technology groups led by Apple.

Just two weeks ago, LVMH boss Bernard Arnault became only the third person — and the first non-American — in history to amass a $200 billion fortune.

Family fortunes: LVMH, led by Bernard Arnault (pictured with his daughter Delphine), is now the tenth largest company in the world, ahead of Visa and just behind Tesla

Arnault, who has earned the nickname “the wolf in cashmere” during his decades at the top, is worth £161 billion according to the Bloomberg Billionaires Index, making him the richest man in the world, beating both Elon Musk and Jeff Bezos.

In January, the 74-year-old retail mogul named his daughter Delphine head of Christian Dior, laying the foundations for keeping the company under family control.

But he shows no signs of slowing down and LVMH has raised the age limit for CEOs from 75 to 80.

LVMH, whose brands include fashion labels Givenchy, Celine, Stella McCartney and Louis Vuitton, has benefited from China’s massive post-pandemic growth.

China’s luxury market has recovered dramatically following the lifting of the country’s zero-Covid policy, with shoppers flocking to high-priced designer bags and clothing.

Europe and the US have also remained resilient despite economic pressures weighing on consumer spending.

Sophie Lund-Yates, principal equity analyst at Hargreaves Lansdown, believes LVMH is “well insulated against economic shocks” thanks to its wealthy clients, who are less inclined to cut corners because of the rising cost of living.

“The ultra-rich are undeterred by economic ups and downs, and inflation is unlikely to affect their spending habits.”

First Republic sees ‘unprecedented deposit outflow’ in first quarter

US regional bank First Republic said late last night that it saw an “unprecedented outflow of deposits” in the first quarter of the year.

Deposits fell by £58 billion in the first three months of the year as the lender was engulfed in the regional banking crisis that led to the collapse of three of its peers.

Deposits fell 35 percent to £83 billion even after the country’s biggest lenders parked £24 billion of their own money with the San Francisco-based bank in an effort to bolster its finances.

The company said it plans to shrink the size of its balance sheet and cut headcount by as much as 25 percent as part of its efforts to stabilize the bank.

The unrest began with the collapse of Silicon Valley Bank, which was put into government receivership after depositors were frightened.

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