by Taro Porschke
LVMH, LVMH Moët Hennessy Louis Vuitton, Société Européenne, is the largest fashion/luxury conglomerate in the world. It is the second largest company in Europe by market value, trailing only behind Novo Nordisk, a pharmaceuticals company that got most of its popularity (and money) recently, following the weight-loss drug craze. In 2023 it was the first European company to surpass a 500 billion dollar valuation and made Bernard Arnault, its CEO, founder and chairman, the richest man in the world numerous times.
But how does a partnership between a winery, cognac brand, and fashion house grow to one of the largest companies in Europe and contribute to the net worth of a man who surpassed Jeff Bezos and Elon Musk at one point?
Simply put, these three companies have not been sleeping since the merger in 1987. LVMH has acquired numerous subsidiaries which manage around 75 brands. These brands include: Dior, Fendi, Givenchy, Celine, Off-White, Loro Piana, Sephora, Fenty Beauty, Tag Heuer, Hublot, Zenith, Bulgari, Tiffany & Co., Dom Perignon, Chandon, Belvedere, and many more.
And realistically, that's probably about every luxury brand any regular person could name if they really tried.
But, does it matter?
Recent Luxury History
Luxury hit all-time highs in 2023, following increased investment and catering towards Asian countries, namely China. China is now the second-largest luxury market in the world, expected to be number one by 2030. Chinese buyers were more willing to spend, especially as US sales fell.
But, amidst troublesome tensions and economic uncertainty, luxury markets fell in 2024, with decreases across the board. This especially hurt LVMH which suffered large drops in revenue and sales largely due to reduced Chinese demand.
Luxury itself is also a difficult market to analyze. Global slowdowns and greater inaccessibility to regular people of luxury goods begs the question of what the future of luxury looks like. In the past, luxury goods served as top-of-the-line quality for a large but reasonable sum of money.
These days, though, as more and more people have more money, and everybody knows about every brand through the Internet, luxury brands have almost too many customers. So, they raise prices (because they can) and bring down the quality of their goods. It's not worth it for the average person anymore, and that's if they could even afford to buy something from one of the aforementioned luxury houses without falling into debt.
And, although it doesn't matter to those who these brands are really catering to, luxury items are supposed to last you a lifetime - so, do you have to be a recurring customer? In theory, no. But luxury companies know this, too, and their models are shifting more towards mass production, lower quality labor (sometimes illegal child labor) and less long-lasting products. After all, their target customer is someone who's probably buying shoes or a bag for a single outing and then is never using it again.
In the end, the average consumer loses - as usual.
Too Pessimistic?
Yes, it's a pretty pessimistic outlook, and it can't all be attributed to LVMH. But, large corporations aren't really your friend, either.
Just a few days ago, LVMH acquired majority stake in Kapital, a small(er) Japanese brand that is home to many ingenious designs, notably its "boro" jackets (fancy patchwork jackets, handcrafted with Sashiko stitching), century denim (very complex, high-quality denim), pillow bombers (bomber jackets which fold up into pillows, a personal grail) and a couple of hype pieces, with its bright yellow smiley faces and skeleton outlined clothing.
Recently, Kapital, wasn't very underground or small anymore, thanks to social media. But, their prices were still relatively fair (in Japan, at least) for a high-end clothing brand boasting real quality and craftsmanship. With LVMH taking a large stake in Kapital, many people are concerned for the future of creative freedom and quality at Kapital, especially because the brand is known for less-than-ordinary designs and its expertly crafted garments. And, other Japanese brands like BAPE have suffered from such losses following large acquisitions, whereas the current BAPE is a repeated copy and paste of their hyped shark motif, prices inflated to the roof.
Gilded Future
If there's one certain thing, it's that consumerism will prevail. And, hopefully, I'm wrong. But, as long as buyers keep buying and people keep seeking out expensive logos to wear to impress the people around them, the luxury market will have buyers.
Hopefully, large oligopolies like LVMH don't kill the creativity that comes part of fashion. Because, at its core, fashion is an art form - it is a means of expression, and designers are artists. Every brand has its own style, its own set of customers it appeals to. The fact that new, innovative uses of cotton and fabric exist and are still so sought after, after thousands of years, is amazing.
Hopefully, conglomerates like LVMH can leave their brands to develop for themselves, without too much control and hopefully, brands like Kapital can not only retain their cultural prestige but keep their quality and craftsmanship up, especially as the world becomes more and more industrialized. Or, at the very least, new Kapitals can spring up, with new, independent designers who keep trailblazing for fashion.
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