Louis Vuitton-owner LVMH becomes Europe’s first $500bn company

Bernard Arnault (right) and his children Antoine and Delphine Arnault

The owner of Louis Vuitton, Christian Dior and Tiffany has become the first European company to be valued at more than $500bn (£402bn), after renewed demand from Chinese shoppers boosted sales.

LVMH, which is run by the world's richest man, Bernard Arnault, surpassed the $500bn milestone after shares ticked 0.3pc higher in Paris. They later dipped back down again. However, it means LVMH has become the first European company to be valued at such a high market capitalisation.

It follows months of share price gains, with LVMH worth around 30pc more than it was at the start of 2023. In the past two weeks, LVMH joined the ranks of the world's 10 largest companies.

The conglomerate, which also owns Tag Heuer and Moët & Chandon, has been buoyed by Chinese customers' spending after strict Covid-19 rules were lifted in December. China is one of the largest luxury markets in the world.

In the latest update from LVMH earlier this month, the company said sales were up 17pc in the first three months of the year amid what it branded a "significant rebound" in Asia. China accounts for around 80pc of LVMH's Asian business, with Louis Vuitton having had a store in Beijing since 1992.

LVMH has not been alone in enjoying a bump from the return of Chinese shoppers into stores, with rival luxury company Burberry reporting "some very promising signs and a change in traffic" into its Chinese stores in January. Analysts have forecast that China's reopening could spur demand for high-end clothing and accessories as much as 20pc higher this year.

Morgan Stanley's Edouard Aubin said: "China should become the industry’s growth engine from this year on, and we expect brands at the top of the luxury-goods pyramid to benefit the most."

Morgan Stanley said both Chinese and Korean shoppers were "increasingly favouring brands with the highest price points, which they view as status symbols, while cutting spending on the less expensive, more fashion-oriented or 'aspirational' brands favoured by Western shoppers".