A special report published in February detailed a 40-year friendship between President Trump and Louis Vuitton Moët Hennessy (LVMH) chairman Bernard Arnault.
That relationship has been tested in recent weeks after President Trump announced a flurry of reciprocal tariffs. With the LVMH’s share price decreasing dramatically, Arnault said the company was placed in “uncharted territory.”
“Until the end of February, everything was going very well. Then we came up against a global economic geopolitical situation that was turned upside down by potential customs duties,” Arnault told shareholders in Paris.
LVMH recently announced that it had missed sales targets for the quarter; however, jewellery and watch brands were resilient. Arnault said LVMH would consider increasing prices in the US market to adjust to the tariffs on a case-by-case basis.
A report from the New York Times reveals that LVMH is advising European leaders to resolve the trade dispute amicably, and that a failure to do so would force LVMH to increase production in the US.
“LVMH is in a trickier situation. Although a huge portion of its customer base is made up of high-wealth individuals for whom a few thousand extra dollars do not mean much, the group had cultivated growing ranks of so-called aspirational consumers through a range of less expensive products, like perfumes and key chains,” writes Liz Alderman.
“Now, tariffs risk pushing up inflation, Mr Arnault said, a shift that could cause those customers to pull back on spending. Higher inflation could, in turn, prompt higher interest rates, another phenomenon that would hurt consumers, he said.
“Mr Arnault declined to answer questions about whether he had spoken directly with Mr Trump. But in France, speculation has run rampant that he may have Mr Trump’s ear, especially after the French billionaire was seated along with his wife and two of his adult children just behind former Presidents Barack Obama and Joseph R. Biden Jr. at the inauguration.”
Amid speculation about the future of LVMH, Arnault recently confirmed he wants to extend the age limit associated with leading the company for a second time.
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