LVMH CEO Arnault Blames Brussels for Trade Fallout, Doubles Down on Ultra‑Luxury

LVMH Moet Hennessy Louis Vuitton SE (EPA:LVMH) Chairman and CEO Bernard Arnault warned shareholders Thursday that escalating U.S.‑EU trade tensions risk undermining free trade—placing the onus on Brussels if negotiations fail to resolve looming tariff disputes.

Key Takeaways

• Blame on Brussels

  • “If Europe is not able to negotiate intelligently, there will be consequences for a lot of companies. It will be Brussels' fault,” Arnault told attendees at LVMH's annual shareholder meeting.

• Urgent Call for Free Trade

  • “Free trade with the United States and trust in trade must be restored,” he emphasized, citing growing uncertainty as a drag on business.

• Impact on Luxury Sales

  • LVMH started the year strongly, but “worsened from March due to economic turmoil linked to tariffs,” Arnault noted.

  • With roughly 25% of revenue derived from the U.S., the group faces both tariff headwinds and broader recession fears.

• Strategic Shift to Ultra‑High‑End

  • Rising inflation and interest rates are squeezing aspirational consumers; LVMH plans to double down on its most exclusive, high‑margin offerings.

  • Shareholders reinforced confidence in Arnault's leadership, voting 99.18% in favor of raising the CEO age limit to 85.

Market and Investor Implications

• Share Performance

  • LVMH shares are down 36% year‑to‑date, outpacing declines in broader luxury indexes amid tariff concerns.

• Competitive Positioning

  • A renewed focus on ultra‑premium products may help buffer LVMH against volume pressure in more price‑sensitive segments.

• Policy Watch

  • Investors will be closely monitoring EU‑U.S. trade discussions for signs of tariff relief or further escalation that could impact margins and sales.

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Bernard Arnault's stark message underscores the stakes for Europe's luxury powerhouses as geopolitical frictions threaten to reshape global trade patterns. LVMH's pivot toward its highest‑end brands aims to insulate profitability even as macro uncertainties persist.