At the close of trading on Tuesday in Paris, Hermès’s market capitalization rose to €248.6 billion ($280.5 billion), edging past LVMH’s €244.4 billion valuation. This milestone places Hermès, famed for its coveted Birkin bags and timeless craftsmanship, in the global luxury spotlight.
The development follows a 7.8% drop in LVMH’s shares, triggered by the company’s announcement of a 2% year-on-year decline in first-quarter sales to €20.3 billion. The downturn was led by softening demand in the United States, a critical market that generates roughly a quarter of LVMH’s global revenue.
Market Jitters and Tariff Tensions
The dip in performance comes amid rising economic uncertainty and a shifting geopolitical landscape. LVMH’s results were announced just days before former U.S. President Donald Trump’s “Liberation Day” on April 2, which saw the rollout of new 10% tariffs on a broad swath of global imports—a move that could weigh further on luxury demand in key international markets.
While Hermès has traditionally taken a more conservative, quality-over-quantity approach to growth, the strategy appears to be paying off as investors seek stability and resilience in a volatile market.
Changing of the Guard
Hermès’s steady ascent in valuation reflects its consistent brand strength, pricing power, and unwavering customer loyalty. Unlike its larger rival, Hermès has largely been shielded from the short-term fluctuations of global retail trends, thanks in part to its limited production and exclusivity model.
LVMH, under the leadership of Bernard Arnault—Europe’s richest individual—remains a dominant force in the industry, boasting a vast portfolio of brands including Louis Vuitton, Dior, Moët & Chandon, and Sephora. However, Tuesday’s market shakeup underscores the growing investor preference for luxury brands with focused, resilient business models in the face of macroeconomic headwinds.
As the luxury sector navigates uncertain terrain in 2025, all eyes will be on whether Hermès can maintain its new position at the top—and whether LVMH can rebound amid growing pressure from both economic forces and nimble competitors.