Hermes overtakes Lvmh to become the world's most valuable fashion house
The capitalisation of the Arnault family group currently stands at 245 billion euros, while that of the house of Birkin is 246 billion
1' min read
1' min read
Hermes has become the world's most valuable luxury house, surpassing Lvhm by a whisker. The brand led by Bernard Arnault, with today's sharp drop (currently 7.7% to EUR 489) caused by disappointing quarterly sales, has slipped to second place. Lvmh's capitalisation at the moment is in fact 245 billion euros, while that
of Hermes (-0.9% to EUR 2,328) to EUR 246 billion.
The ultra-rich customer base, the exclusivity of its goods and tightly controlled production have enabled the house of Birkin to withstand the recent downturn in the
luxury sector - which has suffered the backlash of the slowdown in the Chinese economy and US duties - better than its rivals. This exclusivity has also been reflected in the market: the shares are trading at 50 times earnings, a much higher multiple than any other luxury name.
Thus Hermes has progressively closed the market value gap with Lvmh. The maker of the Kelly and Birkin "probably enjoys the highest pricing power, thanks to the unrivalled desirability of its brand" according to Barclays, which explains that the brand will not need to raise prices as much as rivals to offset the impact of Trump's tariffs on its profit margins.
