Hermes has leapfrogged LVMH to become the world’s largest luxury goods firm – 15 years after it fought off a takeover by its then bigger rival.
The French firm, which is famed for its silk scarves as well as its Birkin handbags, secured the top spot after shares in Louis Vuitton and Givenchy owner LVMH plunged following a worse than feared trading update.
After markets closed on Monday, LVMH reported a 3 per cent fall in sales to £17.5billion over the first three months of the year, sending its shares down 7.8 per cent yesterday.
By contrast, Hermes shares crawled 0.2 per cent higher, giving it a market value of £215billion to LVMH’s £209billion.
It means Hermes has toppled its French rival to become the world’s largest luxury goods company more than a decade after the ‘handbag war’ erupted.
Back in 2010, LVMH boss Bernard Arnault tried to convince the family behind Hermes, descendants of Thierry Hermes who founded the fashion house in 1837, to sell the firm. This was after LVMH discretely built up a 17 per cent stake in Hermes.
Top spot: Hermes, famed for its silk scarves as well as its handbags, became the world’s largest luxury goods company after shares in rival LVMH plunged
But his advances were rebuffed by the Hermes board and LVMH was forced to give up its holdings after a court battle.
The changing of the guard is just the latest setback for LVMH, which has seen its shares fall nearly 40 per cent in the past 12 months – and more than 15 per cent since US President Donald Trump announced tariffs on ‘Liberation Day’ this month.
The slump has wiped £10billion off Arnault’s fortune – though he remains France’s richest man with £125billion to his name.
The luxury sector has struggled since post-pandemic ‘revenge spending’ ran out of steam a couple of years ago.
Hopes of a recovery have been dashed after Trump unleashed a frenzy of tariffs on China, one of the world’s biggest markets for high-end goods.
LVMH had reigned supreme as Europe’s largest firm until it was surpassed in September 2023 by Novo Nordisk, the maker of weight loss drug Ozempic.
Now, LVMH ranks behind Europe’s biggest firm – German software company SAP – as well as Novo Nordisk and Hermes.
Hermes has weathered the luxury demand slowdown. Its results tend to be less volatile than rivals because it enjoys strong pricing power and long waiting lists for its Kelly and Birkin handbags.
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