LVMH CEO Considers Increasing Production in US Amid Tax Concerns
Bernard Arnault, CEO of luxury conglomerate LVMH, has ignited a discussion about France's business attractiveness. Following the company's recent earnings announcement, Arnault revealed plans to explore expanding production in the United States due to concerns over potential corporate tax increases in France.
Despite the considerations, analysts anticipate that any production relocation would likely be limited in scope. European luxury brands seek to capitalize on the growing American wealth, bolstered by strong stock markets and a robust dollar, while Chinese demand for designer fashion remains subdued amidst the property crisis.
According to CFO Jean-Jacques Guiony, Louis Vuitton, LVMH's largest label, already has several production sites in the United States. Arnault has previously opened a factory in Texas and acquired jewelry workshops with the company's purchase of Tiffany & Co.
Arnault's concerns have prompted a response from the French government, which intends to impose temporary corporate tax hikes to address budget deficits. However, the government has emphasized its pro-business stance and acknowledged Arnault's attachment to France.
LVMH remains focused on expanding European production at Dior, its second-largest label. Despite the company's pledge to increase in-house Dior manufacturing, industry experts believe that France and Italy will continue to be the primary hubs for high-end fashion production.