Louis Vuitton eyes US expansion: CEO Bernard Arnault announces second Texas factory; hopes for good results from US-EU trade talks
Bernard Arnault , CEO of French luxury multinational conglomerate Louis Vuitton, on Thursday announced his intention to open a second factory in Texas, while hoping for a good conclusion for US-Europe trade talk, according to news agency Reuters.The recent quarterly numbers put out by the LVMH show lower-than-expected sales. This comes amid the challenges faced by the group in overcoming consumer weariness, while its core fashion and leather segment continues to decline.Arnault has actively urged EU leaders to reduce trade tensions with the Trump administration.“I’m pushing as much as I can for us to reach an agreement with the Americans,” Arnault told the Wall Street Journal in an interview published on Thursday, in which he announced plans for a new factory in Texas by 2027, reported Reuters.First LVMH factory was inaugurated in Texas back in 2019, during the first term of US President Donald Trump, it was widely considered as an attempt by the group to avoid the tariffs on luxury items.But back in April the news agency reported that the factory has been marred by a series of operational issues.The announcement of opening a second factory coincides with the LVMH reporting a 4 percent drop in second-quarter sales ending in June, bringing it to 19.5 billion euros ($22.95 billion), steeper than the projected 3 percent decline.Sales in its fashion and leather goods division, which contributes the majority of its profits, fell by 9 percent, sharper than the anticipated 6 percent decrease, reported Reuters.With the announcement the company is looking towards lifting its consumer sentiments and attempting to shake off market fatigue.Luxury brands finance head Cecile Cabanis believes talks between the EU-US would deliver some good news soon.On being asked how the company views the potential 15 percent levy on the exports to America, Cabanis responded by saying that would be an “overall good outcome for the general mood of our clients,” reported the agency.Aside from its wines and spirits division, the company still has scope to leverage the strong pricing power of its brands, such as Bulgari jewellery and fashion labels Dior and Celine.Arnault, who started out in the US as a real estate developer, has known Trump for years and has often hinted at growing the group’s business in the US following his re-election.“You might have noticed… he recently became a diplomat”, Arnault’s son Antoine, also a senior LVMH executive, told the crowd at the Viva Tech trade fair in Paris last month, apologising for his father’s absence at an event he had not missed in years, according to Reuters.
Revival in China
In China, where the ongoing real estate crisis has curbed demand for luxury goods, there were signs of “tangible improvement,” according to Cabanis.She highlighted the success of Louis Vuitton’s new Shanghai flagship, designed like a massive ship, as proof that the brand still commands global attention.Despite current challenges, most analysts see the prolonged slowdown in the luxury sector as part of a cyclical trend, driven in part by China’s economic slump, persistent inflation, and unresolved trade disputes.Meanwhile, after years of aggressive price increases, LVMH’s billion-dollar heritage brands are now facing mounting pressure from more accessible mass-market players like Coach and Ralph Lauren, as well as from agile, trend-driven labels such as Prada’s Miu Miu.
