Hermès Overtakes LVMH: How the Birkin Maker Became the World’s Most Valuable Luxury Brand

In a dramatic shakeup at the top of the luxury world, Hermès has surpassed LVMH to become the most valuable luxury company on the planet. This milestone comes after a turbulent day in the stock market, where shares of LVMH—owner of iconic brands like Louis Vuitton and Dior—fell sharply following disappointing first-quarter results, while Hermès’ stock remained steady.

What Drove the Shift?

The luxury sector has faced headwinds in 2025. After a pandemic-era boom, middle-class consumers have pulled back on spending, China’s economy has shown signs of weakness, and new trade tariffs from the US have added pressure. LVMH, led by Bernard Arnault, reported a 5% drop in sales for its crucial fashion and leather goods division, missing analysts’ expectations and triggering a nearly 8% drop in its share price. This pushed LVMH’s market capitalization down to €246.5 billion, its lowest since late 2020.

Meanwhile, Hermès, famed for its Birkin and Kelly bags, ended the day with a market cap of €248.1 billion, clinching the title of world’s most valuable luxury company. In dollar terms, Hermès now boasts a valuation of about $276 billion, putting it among Europe’s top three listed companies, just behind SAP and Novo Nordisk.

Why Hermès Is Winning

Hermès’ strategy centers on exclusivity, craftsmanship, and a fiercely loyal ultra-wealthy clientele. Unlike many competitors, Hermès keeps production tight and doesn’t chase mass-market growth. Customers are willing to wait months or even years for coveted items like the Kelly bag, which can sell for over €8,000 and fetch even higher prices on the resale market.

This exclusivity translates to extraordinary pricing power. Hermès shares trade at roughly 50 times forward earnings, far higher than any other luxury brand. Analysts point out that Hermès’ brand desirability means it doesn’t need to hike prices as aggressively as others to offset rising costs or tariffs.

A Look Back—and Forward

This isn’t the first time Hermès and LVMH have clashed. Fifteen years ago, LVMH attempted a stealth takeover of Hermès, a move that shocked the French business world. The Hermès family successfully resisted, and today, the sixth-generation heir Axel Dumas leads the company, which has seen double-digit sales growth in recent years.

While the broader luxury sector is feeling the pinch—with brands like Prada and Kering also seeing stock declines—Hermès’ disciplined approach is paying off. The company’s resilience in uncertain times is now the benchmark for the industry.

What Can Other Brands Learn?

For those in the luxury business, Hermès’ rise offers a few key takeaways:

• Focus on brand exclusivity and desirability, not just volume.
• Maintain tight control over production and distribution.
• Build lasting relationships with high-net-worth clients.
• Resist the urge to chase short-term trends at the expense of long-term brand value.

If you’re building a premium brand—whether in fashion, hospitality, or another sector—consider how Hermès’ patient, disciplined approach to growth and brand management might inspire your own strategy. In a world where trends shift quickly, true luxury still lies in scarcity, quality, and timeless appeal.

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