First half net profit plunges 22% at French luxury group LVMH
Though sales fell four per cent to just under 40 billion euros (S$60 billion), chairman and CEO Bernard Arnault insisted that LVMH 'is demonstrating its resilience in the current context'.
The producer of Louis Vuitton bags and Dom Perignon champagne has been hit especially hard by US President Donald Trump's threat of tariffs, as it generates a quarter of its revenue in the United States.
In the wake of the US president's April 2 'Liberation Day' tariff announcements, Arnault, Europe's richest man, saw Hermes overtake LVMH as the world's most valuable luxury company.
Trump imposed a 10-per cent tariff on imports from around the world that month, but he delayed higher duties on dozens of other countries, with an Aug 1 deadline to strike trade deals or face tougher levies looming.
'We are approaching the second half of the year with great vigilance, and I am confident in LVMH's formidable long-term potential,' Arnault, who was present at Trump's second inauguration in January, said in Thursday's press release.
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Though LVMH has likewise been hit by a trade dispute over European brandy exports to China, a key market for its Hennessy cognac, chief financial officer Cecile Cabanis said the group had seen 'improved demand from the Chinese in China'.
But 'currency exchange effects have led to an extremely sharp drop in demand' from Chinese tourists visiting Japan, she told the press.
Both the wine and spirits and fashion departments posted eight-per cent drops in revenue, to 2.6 and 19 billion euros respectively.
The former was weighed down by 'the impact on customers of trade tensions weighing on the key US and Chinese markets', the results announcement added. AFP
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Straits Times
2 minutes ago
- Straits Times
After almost losing Trump, Putin gets his ideal summit
Sign up now: Get ST's newsletters delivered to your inbox Few analysts believe the Russian leader will be content to stop the war based on a real estate negotiation alone. – In late July 2025, President Vladimir Putin of Russia was facing a stark reality: He was on the verge of losing President Donald Trump, the one Western leader possibly willing to help him get his way in Ukraine and achieve his long-held goal of rupturing the European security order. After months of trying to get Mr Putin to end the war, MrTrump had grown tired of ineffectual phone calls and talks and had begun issuing ultimatums. Even worse for Mr Putin, Mr Trump appeared to have patched up his relationship with President Volodymyr Zelenskyy of Ukraine, despite an Oval Office blow-up earlier in 2025 , that delighted Moscow. It was not clear that Mr Trump would be able or willing to follow through on the threats he had made to put punishing tariffs on nations buying Russian oil , or what real impact such moves would have on Moscow. But Mr Trump's deadline for Mr Putin to end the war was swiftly approaching, presaging some sort of further rift between the White House and the Kremlin. So Mr Putin shifted tack ever so slightly. Despite previous refusals by Russian officials to negotiate over territory in the Russia-Ukraine war, the Russian leader, during a meeting at the Kremlin last week, left Mr Trump's special envoy, Mr Steve Witkoff, with the impression that Russia was now willing to engage in some deal-making on the question of land. 'We're going to get some back and we're going to get some switched,' Mr Trump said on Aug 8. 'There'll be some swopping of territories to the betterment of both.' By speaking a language Mr Trump understands – the language of real estate – Mr Putin secured something he had been seeking ever since January: A one-on-one meeting with the US leader, without Mr Zelensky present, to make his case and cut a deal. Top stories Swipe. Select. Stay informed. Singapore Four men arrested in Bukit Timah believed to be linked to housebreaking syndicates Singapore Criminal trial of Hyflux founder Olivia Lum and five others starts Aug 11 Singapore Profile of Kpod user has shifted from hardcore drug users to young people: Experts Tech Former data analyst creates AI tutor that assesses students based on Singapore schools' criteria Opinion I used to be impatient. 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The White House proceeded anyway. Few analysts believe the Russian leader will be content to stop the war based on a real estate negotiation alone. Mr Putin has made it clear that, among other things, he wants a formal promise that Ukraine will not enter Nato or any other Western military alliances, host Western troops on its territory or be allowed to build up a military that threatens Russia – making Ukraine perpetually vulnerable. 'The fundamental thing for Russia is domination,' Dr Greene said. Mr Alexander Gabuev, director of the Carnegie Russia Eurasia Center in Berlin, said Mr Putin would come into the summit on Aug 15 in Alaska pursuing various scenarios. They include a favourable deal with Mr Trump that the US President successfully forces upon Ukraine or a favourable deal with Mr Trump that Mr Zelensky refuses, causing the United States to walk away from Ukraine, Mr Gabuev said. The third option, he noted, is that the Russian leader continues his current path for another 12 to 18 months, with the expectation that Ukraine will run out of soldiers faster than the Russian war economy runs out of steam. Mr Putin understands that Mr Trump is willing to offer things few other American leaders would ever consider, which could help Russia fracture Ukraine and divide the Western alliance. 'If you could get Trump to recognise Russia's claim to the lion's share of the territory that it has taken, understanding that the Ukrainians and the Europeans might not come along for the ride on that, you drive a long-term wedge between the US and Europe,' Dr Greene said. But despite wanting those things, Mr Putin will not stop the war for them, if getting them means agreeing to a sovereign Ukraine with a strong military, aligned with the West, that is able to make its own arms, Mr Gabuev said. 'Trump is a big opportunity for him,' Mr Gabuev said. 'I think that he understands that. But at the same time, he is not ready to pay the price of Ukraine slipping away forever.' Mr Stefan Meister, a Russia analyst at the German Council on Foreign Relations, said the two leaders would come into the summit with different goals – Mr Trump's being to end the war and Mr Putin's being a strategic repositioning of Russia. 'For Putin, it's really about bigger goals,' Mr Meister added. 'It is about his legacy. It is about where Russia will stand after this war. It is much more fundamental. This creates a different willingness to pay costs.' And despite negotiations about his country's land, Mr Zelensky will not be in the room. 'For Ukraine, it is a disaster,' Mr Meister said. THE NEW YORK TIMES
Business Times
2 hours ago
- Business Times
Diversifying away from US equities and bonds, with Europe being a credible alternative.
[GENEVA] The post World War 2 global architecture worked on the basis that the US provided the world with economic stability, security guarantees in Europe and Asia, as well as safe assets like treasury bonds and higher returns through US equities. And in return, the US enjoyed capital flows from other countries investing their surpluses in it. But this set-up is faltering, said Alexandre Tavazzi, head of the chief investment officer's office and macro research at Pictet Wealth Management. Against the above backdrop, he sees a mega-trend of capital repatriation from the US. He noted that 'the world has a lot of capital tied up in the US', amounting to about 90 per cent of the US' gross domestic product (GDP). 'You don't want to be nasty with the people who have financed you, but this is what is taking place in US,' he said. A major trend that investors can play on is Europe's revival, which is led by Germany's awakening, said Tavazzi. 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With investors looking to diversify away from the US, European stocks and bonds can be credible alternatives, he noted. 'We are all familiar with the fact that there is a fair amount of bureaucratic rigidity in Europe. But this is also a golden opportunity for Europe to coalesce and drive forward a reduction of red tape and more of a joint effort on issues such as common debt issuance or infrastructure development,' he said. He pointed out that it is a myth that the Magnificent Seven have a monopoly on innovation, the seven being US tech giants Alphabet, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. Sagayam sees money starting to flow into Europe, Japan and emerging markets. He also believes that sustainability is important despite the environmental, social and governance backlash among some investors. 'Sustainable investing is actually prudent and should make for better long-term investment outcomes for our clients.' 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Straits Times
3 hours ago
- Straits Times
China consumer inflation unchanged amid anti-price war campaign
Sign up now: Get ST's newsletters delivered to your inbox BEIJING – China's consumer prices held steady in July as deflationary pressures eased on the back of a government pledge to contain excessive competition. The consumer price index was unchanged from a year earlier, the National Bureau of Statistics said on Aug 9. The median estimate of economists surveyed by Bloomberg was for a 0.1 per cent decline. Inflation ended a four-month falling streak in June, turning positive. Factory deflation persisted into a 34th month, with the producer price index falling 3.6 per cent, matching June's decline. Price wars are intensifying deflationary pressures in China, where consumer demand remains fragile. The government has launched campaign to curb the cutthroat competition among businesses that's eroded profits and driven down wages the world's second-biggest economy. China's top leadership vowed at its monthly gathering in late July to ramp up management of overcapacity in key industries but faces a challenge in reflating the economy, and more aggressive efforts to boost domestic demand may be necessary. The state's campaign also seems to have had little effect on people's perceptions, with the price expectation index, based on a central bank survey of households, in decline since late last year. A broad measure of prices across the economy, known as the GDP deflator, has declined for nine straight quarters, its longest streak in decades. Top stories Swipe. Select. Stay informed. Singapore Four men arrested in Bukit Timah believed to be linked to housebreaking syndicates Singapore Criminal trial of Hyflux founder Olivia Lum and five others starts Aug 11 Singapore Profile of Kpod user has shifted from hardcore drug users to young people: Experts Tech Former data analyst creates AI tutor that assesses students based on Singapore schools' criteria Opinion Recognising our imperfections is part of what makes Singapore whole Opinion I used to be impatient. Then I became a granddad Business The risks of using 'decoupling' to own two properties Asia Manila struggles to keep a lasting hawker culture, casts eyes on how Asian nations lifted street food Resilient demand for Chinese goods overseas has helped the economy hold up surprisingly well in the face of US tariffs, but industrial profits are deteriorating as companies struggle to pass on rising costs to consumers, given weak spending power and poor sentiment. Fierce rivalry at home, fueled by excess industrial capacity, has driven exporters to slash prices to boost sales, drawing sharp criticism from abroad and deepening trade frictions. The Communist Party's decision-making Politburo, led by President Xi Jinping, listed the goal of addressing 'disorderly competition' among companies as one of its top priorities when it set the economic policy agenda for the rest of the year at its meeting last month. 'The big picture would remain the same – there is still a long way to go before the economy escapes deflationary pressures. Policymakers are recognszing that 'fixing disorderly competition' is key to addressing the roots of deflation – and more steps may follow,' said Bloomberg analyst Eric Zhu. Mr Xi issued a call in July to 'break involution,' using a term for a destructive state of intense competition sparked by excess capacity that forces people to overwork despite diminishing returns. The president has also questioned the need for local governments to crowd into the same emerging industries, such artificial intelligence and vehicles powered by alternative-energy sources. BLOOMBERG
