With regular price hikes and a boom in luxury spending since 2020, Louis Vuitton's blistering growth propelled the brand’s parent company to a $438 billion market valuation, turning founder and CEO Bernard Arnault into the world’s richest man. His estimated net worth is now $212 billion., making him even richer than Elon Musk.
Louis Vuitton is LVMH’s biggest brand, including Tiffany & Co., Dom Pérignon Champagne, and Christian Dior. It hit $20 billion in sales in 2022, four years after it became the luxury industry’s first brand to hit $10 billion.
A decade ago, Louis Vuitton stores sold mostly leather goods like bags, wallets, and small accessories. Today, most have added categories like women’s ready-to-wear, men’s shoes, watches, jewelry, and perfumes. This entails a change in strategy from trying to be the number one leather goods company to becoming the world’s most influential luxury goods company.
It leveraged its popularity in bags into a broader fashion empire, including suits, dresses, and perfume. During the pandemic, it engaged in store renovations and expansions, rolling out massive marketing campaigns while the competition cut costs. The profit margin was about 50% last year, one of the industry’s highest.
The brand also launched new product lines to serve aspirational consumers at lower prices. Its embrace of street fashion gives it a more fantastic aura of modernity than other traditional luxury companies, such as Hermès and Kering.
Still, it doesn’t sell through wholesalers; there are no end-of-season sales; its perfume is available only at Louis Vuitton retailers and on its website; and it limits supply with small production runs for products in each collection. This has helped the company maintain an air of exclusivity as it broadens its appeal worldwide.
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On the date of publication, Andy Mukolo did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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