French luxury giant LVMH thinks it can hike prices on its premium products by 2 per cent to 3 per cent a year without hurting demand from high-end buyers sharply, top executives said to the French parliament on Wednesday.
Deputy CEO Stéphane Bianchi, testifying at a hearing about international trade matters, indicated that the group has “room to raise prices by 2-3 per cent annually” — a move he hinted would be able to cushion the blow of possible import tariffs. But he cautioned that there is only so much pricing flexibility: He said that this does not imply elasticity is unlimited.
Bianchi’s remarks come as the European Union and the United States navigate renewed trade tensions. Earlier this week, US President Donald Trump postponed his threat to impose 50 per cent tariffs on EU imports, extending a deadline for negotiations to 9th July, 2025.
LVMH can adapt to changing prices differently in different product segments. While the ultra-luxury market is comparatively strong, increasing prices for more affordable items is much less easy. Chief Financial Officer Cécile Cabanis stated that there is no real capacity to raise prices in these categories.
Despite macroeconomic headwinds and weakening consumer trends in some regions of Asia, LVMH will stick to its growth strategy in China. Executives described a recent deceleration in Chinese consumers’ spending and travel during the last three months but stressed that investment intentions in the region are unchanged.
In the US, signs of recovering demand are beginning to show. However, Bianchi said ongoing uncertainty about trade relations with the EU is still creating a challenging business environment.
