"Luxury Brands Slipping into Economic Recession"... Arnaud LVMH Chairman Faces $11.2 Billion Loss

LVMH Stock Plummets 5% on 23rd
US Luxury Market Sales Slump
Expectations for Stock to Surpass 1000 Euros Dashed

This year, the stock price of France's luxury group Louis Vuitton Mo?t Hennessy (LVMH), which had risen more than 30%, plummeted, resulting in an estimated $11.2 billion (14.7548 trillion KRW) paper loss in shares for Bernard Arnault, the world's richest person.

According to Bloomberg, LVMH's stock price on the French stock market closed at 834.20 on the 23rd (local time), down 5.01% from the previous trading day. This is the largest drop in one year and two months.

Bernard Arnault, Chairman of LVMH. [Image source=Reuters Yonhap News]

LVMH is a fashion group that owns the world's most prestigious fashion brands such as Louis Vuitton and Christian Dior. LVMH's stock price rose 32% from the beginning of the year to April, driven by the euro's appreciation against the dollar and increased consumption due to China's economic reopening. On April 23, LVMH's stock price hit a peak of 902.00, sparking forecasts that it would soon surpass 1,000 euros.

The stock price, which had been on the rise, sharply declined amid predictions that the luxury market could shrink due to a U.S. economic recession. Bloomberg reported that industry insiders attending a luxury brand conference hosted by Morgan Stanley in Paris agreed that performance in the U.S. was relatively weak.

Edouard Urbin, a Morgan Stanley analyst, told Bloomberg, "Consumption by 'aspirational consumers' who bought luxury goods despite lacking financial capacity is decreasing." Aspirational consumers refer to those who do not have sufficient financial foundations to purchase luxury goods but buy expensive products for self-display.

Matt Garland, a Deutsche Bank researcher, explained that the increased valuation burden on luxury company stocks was also one of the reasons for LVMH's stock price decline. He said, "Historically, luxury companies' stocks have been highly valued and traded at a premium level among investors. While demand from China has been the driving force behind sales growth, (due to recession concerns) investors will approach luxury company investments more cautiously going forward."

Due to LVMH's sharp stock price drop, Arnault reportedly suffered a paper loss of $11.2 billion in shares in just one day. According to Bloomberg's billionaire index, Arnault's wealth is estimated at $192 billion (253.056 trillion KRW) as of that day.

Earlier, Arnault surpassed Elon Musk, CEO of Tesla, in December last year to become the world's richest person. Arnault is the first European-born individual to become the world's richest person, surpassing France. His wealth comes from a 41% stake in LVMH and a 97.5% stake in the holding company Christian Dior.

This content was produced with the assistance of AI translation services.