LVMH Eyes U.S. Expansion

LVMH CEO Bernard Arnault has sparked debate over France’s business climate by suggesting the luxury conglomerate may expand production in the United States.

“When you return to France and see that we are about to increase taxes by 40 per cent for companies that manufacture here, it is incredible. It is the ideal way to encourage offshoring,” Arnault said on Tuesday.

Following LVMH’s earnings report, he contrasted the “wind of optimism” in the US with the “cold shower” of potential tax increases in France. However, analysts believe any American expansion would remain limited.

European luxury brands are increasingly targeting wealthy US consumers, buoyed by record stock market highs and a strong dollar, while demand in China lags due to its property sector downturn. Louis Vuitton, LVMH’s most profitable brand, primarily manufactures in France but already operates several sites in the US.

Arnault, who attended Donald Trump’s second-term inauguration earlier this month, had previously opened a Texas factory in 2019 during Trump’s first presidency. LVMH also runs sites in California, established in 1990 and 2011, and expanded its US footprint with the $16 billion acquisition of Tiffany & Co. in 2021.

“American clients accept ‘made in the US’… so we can consider the United States,” said LVMH CFO Jean-Jacques Guiony.

“It is clear that we are being strongly encouraged by the American authorities to continue expanding our presence,” Arnault added. “In the current context, this is something that we are looking at seriously.”

His remarks prompted a swift response from the French government, which is grappling with budget shortfalls and proposing temporary corporate tax increases. Government spokeswoman Sophie Primas reassured that France remains pro-business, spotlighting Arnault’s strong ties to his homeland and calling LVMH “the pride of France.”

During a virtual address at the World Economic Forum in Davos last week, Trump extended an invitation to global businesses:
“My message to every business in the world is very simple: Come make your product in America and we will give you among the lowest taxes of any nation on earth. If you do not make your product in America, which is your prerogative, you will have to pay a tariff.”

The US market, where LVMH employs over 40,000 people, is vital to the French conglomerate, contributing 25 per cent of its total sales.

Share this post

Upcoming event

Untitled design (1)
Early Bird Tickets Available

2nd Dubai Sustainable Fashion Summit

Dubai,
UAE
12-13 February 2025