Plot twist in the French luxury universe:
L’Oréal is now worth more than LVMH.
The beauty giant overtook the owner of Louis Vuitton, Dior, Fendi and Givenchy to become France’s most valuable publicly listed company, ending the trading day at around €203 billion, compared with roughly €201-202 billion for LVMH.
Which sounds like finance news until you look at why.
LVMH has been struggling with the global luxury slowdown, particularly weaker demand connected to China, while L’Oréal has been holding up much better.
And part of the explanation being discussed is something economists call the “lipstick effect.”
Basically: when people feel broke, they might reconsider spending thousands on a handbag…
but a lipstick, perfume or skincare product can still feel like an affordable little luxury.
And the stock market is currently giving us a pretty dramatic illustration of that difference.
L’Oréal shares are up this year.LVMH shares have fallen sharply.
In this economy, the handbag stays on the wishlist. The lip gloss goes in the cart
Your Sephora addiction has macroeconomic consequences.
