- LVMH faces a clear decline in 2024, with demand slowing in China and Europe.
- Despite losing billions from his fortune, Bernard Arnault remains among the world’s richest people, boosted by his stake in LVMH.
- Analysts expect a potential rebound in luxury goods sales, especially in China and the United States, as tariffs await…
LVMH, the global luxury goods giant, has faced a number of challenges in 2024 that have temporarily called into question the rapid rise of the business, and unfortunately for LVMH Chairman Bernard Arnault, these challenges have been reflected in a significant decline in his personal wealth. While numbers vary across reports – some publications put the decline at US$32 billion (about AU$50 billion) and others at US$53 billion (about AU$85 billion) – all agree that a significant amount of Arnault’s wealth has been wiped out. Personality.
However, he remains among the richest individuals on the planet, but the scale of these losses highlights the broader challenges facing global luxury brands at a time when economic uncertainty seems endless. Here’s a closer look at LVMH’s performance and how Arnault plans to make that money back…
LVMH chip
Demand for the group’s prestigious brands – including Louis Vuitton, Moët & Chandon and TAG Heuer – fell in several key markets last year. China, the company’s most important market, was particularly weak, while Europe also showed unwelcome signs of slowing consumer demand. Relentless inflation, global economic downturn, and more ephemeral changing consumer habits are some of the factors contributing to this apparent decline.
LVMH shares are down 13% through 2024, reflecting a broader scope Market correction. Group sales remained flat during the first nine months of the year, culminating in a net sales decline of 2% compared to the same period the previous year. Interestingly, Moët Hennessy’s wine and spirits division bore the brunt of this decline, with a significant 11% decline in revenue. Cognac sales have faced difficulties in both China and the United States, forcing LVMH to resort to unpopular discounting methods to liquidate inventory. After a decade of accelerated growth, this not only marked a turnaround in the group’s fortunes, but also highlighted a more widespread weakness in the luxury goods sector amid ongoing global shocks.
However, LVMH continued to make headlines as the main supporter of the Paris Olympics and for contributing more than a billion euros to the restoration of Notre Dame. Smart moves despite setbacks elsewhere. However, even these high-profile endeavors could not completely overcome the challenges facing the company, and Arnault chose to make a major shake-up within the organization, moving the former CFO Jean-Jacques Guionni To head Moët Hennessy and appoint one of his sons, Alexandre Arnault, as Executive Vice President of the Wine and Spirits Division.
Resilience in the face of turmoil
On a personal level: While Bernard Arnault’s net worth may have declined sharply – from around US$231 billion – he still ranks sixth on the global rich list with around US$178 billion. His huge stake in LVMH, through a network of holding companies and trusts, remains his towering asset. Analysts have repeatedly said that Arnault’s willingness to buy more than $100 million worth of the group’s shares in recent months is a sign of unwavering confidence in its long-term prospects.
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Market experts are maintaining a cautiously optimistic outlook for LVMH, which has led to a rebound in demand for high-end goods in China and continued strong performance in the United States, where LVMH typically outperforms its rivals by a comfortable margin. Some expect organic sales to grow by about 4% in 2025 Potential customs disputes In both Beijing and Washington,…
In the long run, a Deloitte Pvt The study predicts that ultra-wealthy families, including those like the Arnault family, could see their combined wealth rise by 2030 from US$5.5 trillion to US$9.5 trillion by 2030. So, while a contraction in 2024 may have Painful for money bags in the United States. In the world, it seems like a temporary blip rather than a permanent setback.