L'Oréal has overtaken luxury giant LVMH to become France's most valuable publicly traded company, marking the first time since 2017 that a non-luxury company has held this position on the Paris Stock Exchange. L'Oréal's market capitalization is estimated at around €203 billion, slightly exceeding LVMH's €201-202 billion. This shift reflects a trend observed since early 2026, during which LVMH's stock price fell by 36% while L'Oréal gained 4%, a market contraction also impacting Kering and the broader luxury sector.
This change is largely attributed to the "lipstick effect," an economic phenomenon where consumers, facing global economic uncertainty, choose more affordable beauty and makeup products over expensive luxury items. Consulting firm Bain indicates that approximately 60 million consumers have moved away from luxury goods due to repeated price increases that made high-end fashion inaccessible for many.
LVMH has been contending with a global luxury slowdown, particularly decreased demand from China, while L'Oréal has shown greater resilience. LVMH's market capitalization has more than halved from its 2023 peak of $213 billion. Industry experts suggest this decline points to a customer base that was more financially strained than income figures suggested, with high earners who previously contributed to luxury growth now becoming more considered in their spending. The rising prices of luxury goods, which increased by an average of 4% per year between 2019 and 2023, coupled with macroeconomic issues, are steering aspirational consumers towards resale markets and higher-end high street brands.
Fashion Week events, while not directly generating revenue, create significant earned media value, indicating consumer attention and cultural relevance. For Spring/Summer 2026, the four major fashion weeks generated a record-breaking $881.2 million in earned media value. Paris Fashion Week alone accounted for over $500 million, while New York generated approximately $100 million. This attention is crucial for brands to build durable brand equity, which can influence future pricing power and customer acquisition. The economic impact of Fashion Week extends beyond brands, with New York Fashion Week generating an estimated $900 million annually for the city through visitor spending, and Milan Fashion Week in February 2026 contributing over €217 million ($252 million) in tourism-related economic activity.
