Why No Other Luxury Company Compares To LVMH

(jingdaily.com) - Most people are astonished by the size and dynamics of the luxury market. Intuitively, they assume luxury is a niche business — even people who work for luxury brands. But what many underestimate is a luxury brand’s enormous value creation potential. This year marks a historic moment for the luxury industry. All brands are hoping for better performances than last year and a speedy recovery for the European and North American luxury markets. Both regions fared poorly during the pandemic, with some categories losing 50 percent or more of their market in these areas that many of the world’s most admired luxury brands call home. With the pandemic still raging across the first quarter of 2021, and most key European markets in strict lockdowns, the news that LVMH just became Europe’s most valuable company might be surprising. According to data analyzed by Finaria, the French luxury house reached a staggering $319.4 billion (264.6 billion euros) as of February 26, 2021, surpassing Nestlé, the Swiss food giant. What’s driving this all-time-high valuation is how the luxury group used 2020 better than other luxury houses and put itself in the pole position for when the markets come back. In short, their strategy execution is a masterpiece of extreme value creation from which other brands can learn.