LVMH lobbies for US-EU trade deal as profits fall 22% and Bernard Arnault buys $1B in own shares

Summary

Bernard Arnault is lobbying European leaders to strike a US-EU trade deal, meeting with German Chancellor Frederick Merz and Italian Prime Minister Giorgia Meloni while speaking directly with President Trump to ease tensions with Brussels. LVMH reported a 22% fall in first-half net profit on Thursday, driven by sharp declines in its core fashion and leather goods division, including Louis Vuitton and Christian Dior.

Luxury faces multiple headwinds at once. China, historically the industry's growth engine, is stuck in protracted economic slump. US consumer confidence, which accounts for one-third of LVMH's sales, has been shaken by tariff uncertainty. Consumers are also openly questioning the value of luxury goods after years of aggressive price increases.

Arnault built the luxury conglomerate model during an era of open global trade and rising middle-class consumption. His $1 billion investment in Dior when it had three stores and $90 million in sales turned into a $9.5 billion business with 439 stores. That strategy depended on borderless commerce and the prestige of European craftsmanship. Now his two largest markets, the US and China, are at loggerheads with Europe. Trump is demanding luxury brands move manufacturing to the United States to avoid tariffs, which directly threatens the brand positioning that premium goods are made in Europe with old-world craft. A Birkin bag made in Texas undermines the entire value proposition.

Arnault is hedging aggressively. He plans to open another Louis Vuitton factory in Texas, a move credited with helping the luxury industry avoid tariffs during Trump's first term. His family holding company has bought over $1 billion in LVMH shares since the end of January, putting him on track to own more than half the company's stock by early 2026. He frames the downturn as temporary and cyclical, not structural, arguing that LVMH's scale—over 75 brands ranging from Sephora to Hennessy—gives it advantages in securing talent, retail locations, and media rates that smaller competitors lack.

Investors are unconvinced. LVMH shares are down 27% over the last six months, though they have recovered 11% in the past month as markets stabilized.

LVMH is in discussions to sell Marc Jacobs in a deal valued around $1 billion. Multiple parties are in talks, including Authentic Brands Group, the brand acquisition firm behind Reebok, Champion, Nautica, Brooks Brothers, and Juicy Couture. Marc Jacobs has lost cultural relevance in recent years and no longer fits comfortably in LVMH's luxury portfolio.