LVMH drops 37% this year; once Europe's largest market cap stock, now out of the top ten

LVMH has not only lost its crown as the French company with the highest market capitalization but has also fallen out of the top ten listed companies in Europe. For this luxury goods giant, which once led the European market during the post-pandemic boom, this change is highly symbolic.

On Tuesday, LVMH shares dropped 2.6%, with its market capitalization shrinking to 201 billion euros (approximately 232 billion dollars), slightly below L'Oréal. The European luxury stocks index compiled by UBS fell about 1.6% on the day. This shift means that LVMH has fallen out of Europe's top ten for the first time since 2017.

Vincent Juvyns, Chief Investment Strategist at ING Bank Brussels, stated:

“Those who claim that Europe has recovered are wrong, Europe has not recovered. What LVMH is telling us is that its main growth engine—the luxury goods sector—has failed.”

LVMH (Moët Hennessy Louis Vuitton Group) reached its peak as Europe's most valuable company in 2023, with its share price once surpassing 900 euros per share, but has since fallen by about 55% cumulatively. As demand for luxury goods declines, several investment banks have downgraded LVMH's rating.

This year, LVMH's share price has plunged about 37%, falling back to levels seen during the global store closures caused by pandemic lockdowns. The current drop is now comparable to that during the global financial crisis.

According to the Bloomberg Billionaires Index, LVMH’s largest shareholder Bernard Arnault dropped out of the global top ten richest people list last week, making the list now dominated mainly by US tech industry billionaires.