Sliding LVMH Market Value Prompts Luxury Firm’s CEO to Urge US-EU Free Trade

To LVMH CEO Bernard Arnault, the world has a new look and it’s unfashionably chaotic. 

His luxury giant — which counts Louis Vuitton, Dior, Fendi, and Givenchy among its holdings — had a tumultuous week that included being briefly overtaken by French rival Hèrmes as la République’s most valuable firm. Investor worries about US tariffs have dragged its shares in Paris down 24% this year but Arnault, the world’s sixth-richest man as of Friday, is not pointing the finger at America.

Blame Brussels?

European luxury houses including LVMH, Hèrmes, and Chanel entered 2025 banking on well-heeled Americans as their best bet to offset weakening demand in China where, well before the latest trade conflicts, economic malaise was fueled by a slowing property sector, spiraling local government debt, and declining household consumption.

Instead, they ended up with a double whammy. There’s the US threatening 20% tariffs on products from the EU, currently subject to a 90-day pause, in a threat to one key market. And there’s the full-on trade war that’s broken out between the US and China, which threatens to further erode demand in Asia. When LVMH reported its first-quarter results last week, a surprise 5% drop in organic sales at its fashion and leather goods division — a luxury industry bellwether — was further off the mark than a strip mall Louis Vuitton handbag knockoff: Markets expected 1% growth. An 11% drop in LVMH Asia sales outside of Japan added to the worrying signs.

Speaking at LVMH’s annual shareholder meeting on Thursday, however, Arnault did not cast blame across the Atlantic:

• If 90 days of negotiations can’t yield a way to stop President Trump’s proposed 20% tariffs on the EU from taking effect, he told the meeting, “it will be Brussels’ fault.” The European Commission — the European Union executive branch headquartered a mere 80-minute train ride from Paris in the Belgian capital — negotiates trade deals for the bloc’s 27 member states.
• “Europe is not run by a political power but by a bureaucratic power that spends its time issuing regulations that are unfortunately imposed on all member states and that penalize our business sectors,” he said, urging EU countries to try and manage negotiations with Washington. He went on to call for a US-EU free trade agreement (something Trump advisor Elon Musk has also wished for), and suggested that without one, his company could be forced to move production stateside.

LVMH makes 25% of its annual sales in the US, but if Arnault makes good on the pledge to add US production, previous efforts do not augur well. Reuters reported earlier this month that an LVMH Texas factory, whose opening Trump attended in 2019, has a 40% waste rate for leather goods, about twice the industry standard, because of frequent production errors. It’s one of the company’s worst-performing facilities in any country.

His Lucky Number: Whatever the challenges facing LVMH, they’ll be Arnault’s for a while longer. Over 99% of shareholders voted at the annual meeting to allow the 76-year-old to keep his job until he turns 85 by raising the maximum age of its CEO and chairman roles by five years. As rough a week it was for the company, it was even worse for aspiring successors.