LVMH Enters Into World's Top 10 As Market Cap Nears 500 Billion USD

LVMH, Europe's luxury goods selling company by market value, has now made it to the world's top 10 ranking companies on Thursday according to Bloomberg.

The company's first-quarter sales beat sparked a 5% increase in the share price on Thursday, giving the luxury powerhouse a 29% rally for the year. That, along with a gain in the euro against the dollar, further lifted LVMH's market capitalisation to 486 billion USD, briefly taking the 10th spot and making it to 10 world's biggest companies ranking list. If it reaches 500 billion USD, it would become the first European company to achieve that milestone.

"This illustrates the rise of wealthy people across the world, of a polarized society," said Gilles Guibout, head of European equity strategies at AXA Investment Managers. "The luxury sector is therefore experiencing strong growth."

For a growing crowd of investors, LVMH and its French luxury rivals are to the European stock market what Big Tech has been to the US: Dominant businesses whose growth holds up even as the economy waxes and wanes. Shares of LVMH and Hermes International have on average returned more than 20% annually in the past decade and Kering has returned 16%.

LVMH was created in 1938 and is the only group present in all five major sectors of the luxury market: Wines & Spirits, Fashion & Leather Goods, Perfumes & Cosmetics, Watches & Jewelry and Selective Retailing. It is the producer of Louis Vuitton handbags, Moet & Chandon Champagne and Christian Dior gowns.

LVMH's 48% stake is owned by Bernard Arnault's family, LVMH's performance was driven by Chinese shoppers splurging on pricey goods after emerging from pandemic lockdowns. The company registered growth in all regions even with a "bit of a slowdown" in the US.

Along with the company's growth in market cap, Bernard's fortune also soared by 12 billion USD on Thursday to almost 210 billion USD, making him the first person outside the US to accomplish the feat of becoming the world's richest person.