Hermès International SCA briefly overtook LVMH Moët Hennessy Louis Vuitton SE as France’s most valuable listed company, marking a dramatic twist in a rivalry that dates back more than a decade. On Tuesday, Hermès’s market capitalization reached €243.65 billion ($276.3 billion), edging past LVMH’s €243.44 billion on the CAC40 index. The shift occurred as shares of LVMH tumbled by as much as 8.4% following weaker-than-expected first-quarter results. LVMH’s slowdown in China and the United States, coupled with growing concerns over a potential trade war, triggered the sharp decline and propelled Hermès to the top spot, if only temporarily.

Strategy to Remain Independent Pays Off

Hermès’s climb marks a vindication of its long-held strategy to remain fiercely independent. In 2010, LVMH’s controlling shareholder and billionaire CEO Bernard Arnault revealed that he had secretly acquired a stake in Hermès through equity derivatives. The move stunned the French business world and prompted Hermès family members to unite and fend off what they viewed as a hostile takeover attempt. The family eventually forced Arnault to unwind the position, reinforcing their control and commitment to independence.

Hermès Outperforms in a Luxury Downturn

While much of the luxury industry grapples with slower consumer spending, Hermès has outperformed rivals by focusing on ultra-wealthy clientele and maintaining a model of managed scarcity. The company continues to attract demand with exclusive products like the Birkin and Kelly handbags, which can sell for around €10,000 in Paris and often fetch significantly higher prices in the resale market. Hermès reported sales of €15.2 billion in 2024 and an operating profit of €6.2 billion. The company will release its first-quarter sales report on Thursday.

LVMH Faces Pressures from Diversified Portfolio

LVMH, which owns major brands such as Christian Dior, Tiffany & Co., and Sephora, reported sales of €84.7 billion and an operating profit of €19.6 billion in 2024. Despite its scale, analysts say LVMH may be affected by a conglomerate discount. Units like Sephora operate on slimmer margins compared to its flagship Louis Vuitton brand. On Monday, LVMH posted first-quarter results that fell short of expectations, particularly in its key fashion and leather goods division, contributing to the stock’s steep drop.

Heritage and Exclusivity Fuel Hermès’s Growth

Founded in 1837 as a harness-maker, Hermès has cultivated a brand synonymous with craftsmanship, heritage, and exclusivity. The company’s tightly controlled production processes and long waiting lists for products help drive demand and maintain pricing power. By continuing to focus on high-net-worth consumers and avoiding overexpansion, Hermès has managed to shield itself from wider market volatility.

Billionaire Stakes and Market Legacy

Although Bernard Arnault frequently ranks among the world’s richest individuals — currently fifth on the Bloomberg Billionaires Index — the Hermès family holds the top spot in Europe. Led by sixth-generation heir Axel Dumas, the family’s collective fortune was estimated at around $171 billion as of December. In February 2025, Hermès briefly crossed the €300 billion market cap mark, although broader concerns over tariffs and global trade tensions have since pressured luxury valuations.

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