L’Oréal became France’s most valuable listed company on Tuesday, overtaking luxury giant LVMH as weaker demand continues to weigh on the global luxury sector. L’Oréal’s market capitalisation reached around €203 billion, compared with about €201 billion for LVMH, marking the first time since 2017 that a non-luxury company has held the top position on the Paris stock market.
L’Oréal shares have risen about 5% this year, while LVMH has fallen 35%. Analysts cited the “lipstick effect,” where consumers facing economic uncertainty may choose smaller affordable luxuries such as cosmetics instead of expensive handbags, clothing and jewellery. LVMH has also faced pressure from weaker demand in China and broader economic concerns.
LVMH, controlled by Bernard Arnault’s family, had become Europe’s most valuable company during the pandemic-era luxury boom in 2021. Its shares fell 2.3% on Tuesday, while the company also dropped out of Europe’s 10 largest companies by market value. Analysts said ongoing economic uncertainty, inflation concerns and changing consumer spending could continue to challenge the luxury sector.
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