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French luxury giant LVMH said it had margins to increase the prices of its premium goods by 2 to 3% to offset President Donald Trump’s tariffs, but two products will likely not see any price hikes.
LVMH finance chief, Cécile Cabanis, said in a hearing in the French parliament on Wednesday that increasing the price of cognac and lower-priced beauty products would be difficult, per Reuters’ translation.
Cabanis said “the capacity to raise prices is not there” for these two products, per Reuters.
Other products, like high jewelry, could withstand price increases. Per Reuters, LVMH’s deputy CEO, Stéphane Bianchi, said in the hearing that buyers of LVMH’s most premium products, like high jewelry, are likely to be able to absorb price increases.
LVMH has seen a difficult few quarters, particularly with its alcohol sales.
The company’s cognac and spirits division reported a 17% sales decline in the latest quarter compared to the year before, per its earnings report.
The report cited reasons for the slow performance, including “soft demand for Cognac in the United States and in China” and “uncertainties surrounding tariff policies.”
LVMH’s cognac and spirit sales in 2024 were down 14% compared to 2023.
Its perfumes and cosmetics sales remained flat in the recent quarter.
It’s not just cognac that’s suffering — in the first half of 2024, LVMH sold 15% fewer Champagne bottles than the year before.
In April, LVMH said it was looking at moving more of its production from Europe to the US to mitigate tariff risk.
Per Trump’s announcement on April 2, a baseline 10% tariff would be applied to goods from all countries entering the US. Goods from the European Union would be subjected to an additional 10% “reciprocal” tariff.
But on April 9, Trump announced a 90-day pause on the additional tariffs to allow room for trade negotiations.
Many of Trump’s tariffs were blocked on Wednesday by the US Court of International Trade. However, the court did not specify what tariff-related action the administration must take. The Justice Department has appealed the court’s order.
Representatives for LVMH did not respond to a request for comment from Business Insider.
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