LVMH CEO Bernard Arnault sounded upbeat about what President Donald Trump’s policies could mean for the world’s largest luxury company during its 2024 earning call Tuesday.
The call came days after the 75-year-old French billionaire was seen attending Trump’s inauguration with his wife Helene, daughter Delphine, and son Alexandre. Both the children hold prime positions within the luxury conglomerate and are on the LVMH board.
The Arnaults’ presence alongside top business leaders like Alphabet’s Sundar Pichai and Meta’s Mark Zuckerberg prompted questions about how the new U.S. president and self-proclaimed “tariff man” may impact the luxury giant.
When asked about it, the LVMH CEO was positive about the company’s flourishing business in the U.S.
“In the U.S., people are welcoming you with open arms,” Arnault said during the Tuesday call, translated live into English. He admitted that returning to France afterwards felt like a “shock”.
Arnault added that Trump “encourages” subsidies in American workshops, whereas taxes continue to soar in LVMH’s home country, pushing the company to outsource.
"It's clear that we are being strongly pushed by the American authorities to continue to build out our presence. In the current context, this is something that we're looking at seriously," Arnault said, according to Reuters.
American luxury-lovers
The tariffs, the scale and timeline of which remain unclear, would come at a tricky period for the luxury sector, which has started showing early signs of bouncing back from a harsh slowdown.
Much of the slowdown has been attributed to poor demand from Chinese shoppers, but aspects like a change in sentiment towards luxury also played a part.
LVMH’s 2024 sales exceeded analyst expectations but were flat and didn’t inspire hope of a sector-wide turnaround. Following strong results from Swiss luxury rival Richemont, analysts hoped the final quarter covering the holiday period would reflect a better appetite for LVMH, too.
“This is a reminder that LVMH has work to do at Dior…as well as in other divisions,” Bernstein’s Luca Solva wrote in a note late Tuesday.
The U.S. could be the key to LVMH’s growth in the coming years as the center of gravity within luxury slowly shifts away from China. LVMH makes about a quarter of its revenue from the States (Europe contributes another 25% and Asia excluding Japan represents 28%).
As seen with Richemont, Americans are ready to splurge on high-end goods. Arnault also observed an eagerness for luxury goods when he was in the U.S., where new stores are slated to open in 2025.
Tariffs would make luxury goods more expensive for Americans—something that fashion houses, small and big, are trying to get a grip on.
Representatives at LVMH didn’t immediately respond to Fortune’s request for comment.
What about Trump’s tariffs?
The luxury majors went all out on price increases during the pandemic, turning aspirational shoppers away from the sector. Experts warn that steep tariffs could spark a wide range of responses, from further price hikes to even moving some production to the U.S.
LVMH’s advantage is that it already has several production sites in the United States. In addition, Trump and Arnault, who is Europe’s richest person, had a relationship even before the president’s first term.
The two met when Arnault was exploring a career in real estate development in the 1980s.
They’ve maintained their rapport since, despite tariff scares. In 2019, Arnault opened Louis Vuitton’s factory in Texas, and Trump was an invitee. The president praised Arnault as “one of the great men” who “really delivered.”
“They’re [LVMH] going to do some wonderful things in this country. Jobs. A lot of jobs,” Trump said at the time, according to the Financial Times. LVMH currently employs over 40,000 people in the U.S.
Their children have also been in touch, with Ivanka Trump attending the opening of Alexandre Arnault’s wife's boutique.
It remains to be seen how the possible tariffs play out. But at the least, Arnault has Trump’s ear, which could benefit both LVMH and the entire luxury sector.
