Paris Stock Market Is Held Back as LVMH Shares Lose Their Luster
By and Julien Ponthus
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After being a boon to the Paris equity market for years, LVMH stock is now its biggest drag.
France's benchmark CAC 40 index is trailing the regional Stoxx 600 gauge by about 9 percentage points over the past year and has also underperformed during the current five-week market rebound. LVMH has fallen by a third in that time, accounting on its own for more than 70% of the CAC's relatively poor performance.
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CNBC
20 hours ago
- CNBC
Spirit makers face a sobering cocktail of challenges — from tariffs to teetotalers
Global spirit makers are staring down a sobering cocktail of challenges as tariffs and brand boycotts threaten to exacerbate wider shifts in drinking habits. French cognac maker Rémy Cointreau on Wednesday became the latest spirits maker, following Diageo and Pernod Ricard, to withdraw its sales targets on increased economic and trade uncertainty. "Given the continued lack of macroeconomic visibility, the geopolitical uncertainties surrounding U.S.-China tariff policies, and the absence to date of a recovery in the U.S. market ... the conditions required to maintain [Remy Cointreau's] 2029-2030 targets are no longer in place," it said in a statement. The move came as full-year sales at the group's cognac business, which includes its namesake Remy Martin brand, fell 22% on an organic basis on slowing U.S. consumption and "complex market conditions" in China. The popular brandy variety, which hails from the French region of Cognac, has been particularly caught in the crosshairs of ongoing U.S.-Sino tensions. LVMH similarly saw a 17% drop in its Hennessy cognac in the first quarter. But the specialty drink is far from alone as trade barriers weaken already drying demand for spirits. LVMH's wine and spirits remains the French luxury group's worst performing division, while Diageo spirits including Tanqueray, Gordon's and Smirnoff saw the steepest declines in the first quarter as sales of Irish stout Guinness rallied ahead. "Distilled spirits in the U.S. are going through a correction, and U.S. tariffs add another layer of uncertainty," Jefferies said in a note last month. The prestige — and often legal requirements — associated with spirits and wines mean that they are heavily dependent on local production and thus heavily exposed to U.S. import levies. Champagne must be produced and bottled within the Champagne region, for instance. "With spirits and wines you have terroir caches, and that means you're producing locally and exporting. Hence it's much more vulnerable to geopolitical tensions," Sanjeet Aujla, analyst at UBS, told CNBC via video call. Remy Cointreau estimated that tariffs as they currently stand could serve a 65-million-euro blow ($55 million) to its business after mitigating measures. Diageo, meanwhile, said about 25% of its business is set to be impacted by duties. The same does not apply for beer, which relies on local production and has been flagged as an unlikely winner from brewing trade divisions. Notably, the world's largest brewer AB InBev, as well as Dutch and Danish beermakers Heineken and Carlsberg all maintained their full-year guidance in the first quarter. As a result, wines and spirits are potentially more exposed to brand boycotts too, with consumers more likely to swap out a particular product on political grounds in favor of a locally-made alternative. The tariff hit comes as the industry has slowed over recent years following a strong decade of growth, particularly during the Covid-19 pandemic. Locked-down consumers forked out more on alcohol in 2020 and 2021, fueling a simultaneous surge in premium brands. "During the pandemic, not only did people drink more, they premiumized more," Aujla said. Spirits are often seen as an affordable luxury, especially in good economic times. But they nevertheless tend to be an occasional purchase, with many Covid-era stockpiles remaining in liquor cabinets across the world. As economic conditions turn, however, consumers may be less inclined to cough up $100 for a good bottle, instead downtrading or opting for lower-cost ready-to-drink (RTD) alternatives. "Spirits-based RTDs are weighing on distilled spirits growth alongside the impact of cumulative inflation," the Jefferies note said, adding that downtrading was most visible in vodka and rum products, while demand for premium whisky, tequila and gin remained more robust. "That [premiumization] is on pause today, given the cyclical headwinds we have in the industry," Aujla added. The drying demand comes as health and wellness trends spark a shift in consumer habits, with more people becoming "sober curious" and experimenting with lower alcohol consumption. Indeed, many drinks makers have sought to embrace that shift with new ranges of low and no alcohol products. Meanwhile, the proliferation of weight loss drugs — and early evidence of their role in suppressing alcohol cravings — pose another potential challenge for the industry. Nevertheless, analysts remain divided over the severity and permanence of the downturn. "There is considerable debate over the extent to which currently anemic demand is cyclical or structural," James Edwardes Jones, analyst at RBC Capital Markets, said in emailed comments. Cyclical pressures refer to economic headwinds and hangover supplies from the Covid-era, while structural shifts refer to changing consumer patterns. "It's a bit of both, and more cyclical than structural," Aujla said. "But when the cyclical headwinds dissipate, we think US Spirits industry growth will be 1-2% lower than the 4-5% historical growth."
Business of Fashion
21 hours ago
- Business of Fashion
Fashion's Musical Chairs Ends — With Men in Almost Every Seat.
LOS ANGELES — This week, with the confirmation from LVMH on Monday that Jonathan Anderson is taking over creative direction of the women's, men's and haute couture collections at Dior, all of the empty chairs at fashion's top houses have now been filled. The pieces are now in place for the biggest fashion month ever this autumn. Among all the creative reshuffling, three of our industry's most talented designers have ended up with three of the biggest jobs at a critical time when luxury is facing a global downturn. In addition to Anderson's new role at LVMH-owned Dior, Demna is gearing up for his debut at Gucci, which will come after his final couture show for Balenciaga in July, and Matthieu Blazy is now installed at Chanel. That most of the big design roles have been filled by men has been a big topic in fashion of late. Save for Sarah Burton at Givenchy, Chemena Kamali at Chloé, Veronica Leoni at Calvin Klein Collection, Louise Trotter at Bottega Veneta and Silvia Venturini Fendi at Fendi, all of the big jobs in fashion are occupied by men. Loewe, Balenciaga, Jil Sander, Celine and Maison Margiela have also appointed men as creative directors. On Thursday, I popped into Neiman Marcus in Los Angeles, to take the temperature of what all of these changes mean. The store was a ghost town with nary a customer in sight. Admittedly, it was only 10:30 a.m. — a bit early for a splurge, but the countless displays shilling luxury fashion and leather goods for 'up to 50 percent off' spoke volumes about the state of the business today. As I was examining the Burberry wares on the ground floor (lots of trench coats and accessories emphasising the Burberry check), one of the store's employees and a dedicated BoF reader approached me to say hello. I asked how business was doing and he simply motioned around the shop-in-shops by Dior, Chanel, Bottega Veneta and Loewe and said all of this is about to change. Customers (and Neiman Marcus sales associates) are mostly in wait-and-see mode, he said, as the upcoming fashion season will bring a lot of creative transformation. This is long overdue. Gucci is the lynchpin of the Kering group, where sales have nosedived. Revenues at Kering's flagship brand plummeted by 23 percent in 2024 to €7.7 billion ($8.8 billion), down from €9.9 billion in 2023. The decline worsened in Q1 2025, with a 25 percent drop year on year. The group's share price has tumbled by more than 60 percent over the last two years. Demna (Getty Images) When Kering executives announced in March that Demna would move from Balenciaga to Gucci in July, luxury market analysts and industry watchers scratched their heads. But I remain convinced that if Demna — one of the most gifted and thoughtful designers working fashion — is able to re-imagine Gucci and move on from his once ultra-popular Balenciaga aesthetic, this could be a very smart move because it simultaneously gives Demna a new creative challenge while breathing new life into Gucci, which accounts for more than 60 percent of Kering's profits. Then there's Chanel, where Matthieu Blazy is in the hot seat. Known for his incredibly creative, globally inspired, craft-focused fashion shows at Bottega Veneta, Blazy has been tasked with upping Chanel's fashion quotient. With the most well-defined codes of any luxury brand, as well as a slew of iconic products (think quilted leather flap bags like the 2.55, bouclé tweed suits and bi-colour patent shoes), the brand is pretty resilient even in times of trouble. Matthieu Blazy speaking at BoF Voices in 2023. (Getty Images) But without a strong fashion direction, Chanel's cultural relevance has waned since the passing of Karl Lagerfeld in 2019. Meanwhile, revenues fell by $1 billion in 2024, down 4.3 percent year on year, as Chanel continued to raise prices by an average of 59 percent between 2020 and 2023, leading customers to question the value of Chanel's products and pull back from the brand's core leather goods offering. Executives are counting on Blazy to bring back Chanel's fashion magic while they think about how to recalibrate their pricing strategy. It's a similar story at Dior, where prices increased by an average of 53 percent over the same period. LVMH does not break out individual brand performance, but said revenues declined by 'slightly more' than the average 5 percent decline in the group's fashion and leather goods division in the first quarter of 2025. In an in-depth interview announcing Anderson's appointment, Delphine Arnault agreed with me that pricing is a big issue to address. For now, she is counting on Anderson's creativity and a focus on customer experience in Dior's upcoming megastores in Los Angeles and New York, to help turn things around. Jonathan Anderson speaking at BoF Voices in 2023. (Getty Images) As I was walking the floor of Neiman Marcus it was hard not to note that with the departures of Maria Grazia Chiuri at Dior and Virginie Viard at Chanel, men are back in charge. While pricing and fashion oomph may have been challenges under their tenures, Chiuri and Viard both oversaw an unprecedented expansion of these megabrands post-Covid, leaving me wondering if what might be gained in fashion relevance could lead to a lack of the connection these female designers were able to foster with their female customers. I've been asking some industry insiders why there is such a paucity of women at the helm of the big brands. One person posited that it's because all of the number two designers — the first go-to when brands are looking to appoint a new creative director — are also mostly men. Seems like that old adage that we tend to pick people who look like us holds true in fashion as well. If this is indeed the case, the change we need to see regarding women in the ranks of the industry's top creative positions needs to start with some of these men appointing more women as their number two. Fine. But there has to be more to it than just this explanation. Truly understanding (and valuing) how women designers connect differently to their customers — and giving them the opportunities to demonstrate this — must also be part of the change. Otherwise, the reign of men in top jobs is set to continue. Imran Amed, Founder and Editor in Chief P.S. Please join us next Monday, June 9 and Tuesday, June 10 for The Business of Beauty Global Forum 2025 livestream with speakers including Hailey Rhode Bieber and Tracee Ellis Ross. Register now. Below are my top picks from our analysis on fashion, luxury and beauty this week: 1. Under Pressure: Can Fashion's Sustainability Efforts Survive? With the industry in tariff paralysis and policymakers rolling back regulation, sustainable fashion advocates worry the movement is running out of steam. (Christophe Stache/AFP via Getty Images) 2. Case Study | The New Rules for Getting Acquired. Securing an exit at a desirable valuation has gotten harder for start-ups in recent years. But brands with strong growth strategies and loyal followings can still attract buyers that will maintain their integrity while taking their businesses to the next level, regardless of economic conditions. 3. How to Revive a Sleeping Beauty Watch Brand. A group of investors is reviving the Danish watch company Urban Jürgensen, a 250-year-old name revered by connoisseurs but largely unknown outside that bubble. (Getty Images) 4. Is Nike Finally Winning With Women? With bold marketing, a revamped leadership team under new brand president Amy Montagne and star power from A'ja Wilson, Nike's long-promised women's push is starting to stick. (Courtesy/Courtesy) 5. Beauty's Hottest New Trend: The Founder Buyback. Original influencer Huda Kattan has regained majority ownership of her namesake beauty brand and sent a message to the greater industry: When it's time to course-correct, you need your best driver. (BoF Team) This Weekend on The BoF Podcast (Sporty & Rich) Emily Oberg grew up far away from the fashion world in Calgary, Canada. After moving to New York for a role at the media company Complex, Oberg quickly built her profile as a tastemaker in the streetwear scene. But eventually, she got the entrepreneurial itch and leveraged her experience to turn Sporty & Rich, which started as a mood board on Instagram, into a multi-million-dollar brand with a dedicated community following. On a recent trip to Los Angeles, I had the opportunity to sit down with Emily to reflect on her unconventional path into fashion, how she made strategic business choices to grow her business, and the significance of world-building in creating an aspirational lifestyle brand. To receive this email in your inbox each Saturday, sign up to The Daily Digest newsletter for agenda-setting intelligence, analysis and advice that you won't find anywhere else.
Yahoo
21 hours ago
- Yahoo
Tensions between the US and China have delayed Apple's AI rollout in China, FT reports
The Financial Times claims that the Cyberspace Administration of China (CAC) is delaying the introduction of AI services by Apple Inc. (NASDAQ:AAPL) and Alibaba in China. A wide view of an Apple store, showing the range of products the company offers. Their February deal to incorporate AI technologies into iPhones in China is on hold due to geopolitical tensions resulting from U.S. President Donald Trump's trade war. Consumer-facing AI technologies need regulatory permission, and the CAC has not yet given its approval to these applications. The business is facing diminishing iPhone sales in China due to increased local competition, particularly from Huawei, which has integrated DeepSeek's AI models into its handsets. The firm is at a disadvantage to its AI-enabled Android rivals due to its lack of sophisticated AI technologies, such as ChatGPT-powered features and Apple Inc. (NASDAQ:AAPL)'s postponed "Apple Intelligence." More pressure is added by Trump's recent pronouncement of a 25% tariff on iPhones sold in the US that are not produced locally. New software improvements are anticipated during Apple Inc. (NASDAQ:AAPL)'s WWDC event, which takes place from June 9–13. While we acknowledge the potential of AAPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 10 High-Growth EV Stocks to Invest In and 13 Best Car Stocks to Buy in 2025. Disclosure. None. Sign in to access your portfolio
