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At $329 Billion, LVMH Is Now the Most Valuable Company in Europe

The luxury giant has eclipsed Nestle to claim the top spot.

File photo dated June 2011 of the Louis Vuitton flagship store on the Champs Elysees in Paris, France. Vendome sold part of the brand rights of its name to Louis Vuitton. In 2018, shortly after the announcement of the flagship brand of the LVMH group of its intention to set up a leather goods workshop in this small town of Loir-et-Cher, located less than 200 kilometers south of Paris, France, the municipality sold the Vendome brand for 10,000 Euros for its leather products. It did it again at the start of the year, ceding her brand for the same amount, this time for jewelry products. Photo by Alain Apaydin/Abaca/Sipa USA(Sipa via AP Images) Abaca Press

LVMH has devoured the largest food and beverage company in the world, Nestle, to become the most valuable company in Europe.

According to the research data analyzed and published by Finaria, the French luxury powerhouse’s market capitalization stood at approximately $319.4 billion (€264.6 billion) as of February 26, 2021. This surge pushed it past Nestle which was valued at roughly $292 billion (€242 billion). As of publication, Bernard Arnault’s ever-expanding empire is sitting at $328.9 billion, putting it a full $20 billion ahead of the Swiss food giant’s $308.7 billion. To put this in context, LVMH now ranks as the 21st most valuable company in the world. Apple sits on top of that list with a market cap of just over $2.1 trillion.

As the world’s largest luxury group, LVMH comprises 75 primary brands across five categories, including leather goods behemoth Louis Vuitton, the champagne and spirits group Moet-Hennessey, and high-end fashion houses Dior, Givenchy and Fendi, to name but a few. The conglomerate also recently acquired storied US jeweler Tiffany & Co. for $15.8 billion in the most expensive deal in the history of the luxury business.

While LVMH shares (and profits) dropped significantly in the first half of 2020 due to the Covid-19 pandemic, by early November they had bounced back and finished the year with a gain of almost 24 percent at $617 (€510). In fact, LVMH’s share price has actually increased nearly 43 percent since this time last year.

Press conference of Bernard Arnault, LVMH Chairman. LVMH, the world's number one luxury company unveiled during a press conference a plan to buy Christian Dior Couture and minority interests of the Christian Dior group for a total of 12 billion euros. Paris, FRANCE-25/04/2017. (Sipa via AP Images)

LVMH Chairman Bernard Arnault certainly has reason to smile.  Romuald Meigneux/SIPA

Overall, LVMH’s revenue sank by 16 percent to $53 billion (€44.7 billion) in 2020, which is not bad at all given the circumstances. The group’s solid performance is due to two primary factors. Firstly, its steadfast fashion and leather goods division. Throughout 2020, this division’s organic revenue only dropped 3 percent and thus accounted for 86.5 percent of LVMH’s profits for 2020.

Second, LVMH’s resilient sales throughout Asia. The group registered 34 percent of its sales in Asia last year (up 21 percent YoY), compared with 24 percent in the United States. In contrast, sales in Europe fell by 24 percent. The group also managed to boost online sales as visits to brick-and-mortar stores declined.

As for 2021, analysts are projecting an increase of 18 percent in revenue and a 67 percent uptick in earnings for LVMH. The group’s chairman is equally optimistic.

“In a context that remains uncertain, even with the hope of vaccination giving us a glimpse of an end to the pandemic, we are confident that LVMH is in an excellent position to build upon the recovery for which the world wishes in 2021 and to further strengthen our lead in the global luxury market,” Arnault said in a statement.

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