Shares of LVMH edged up +2.6% to €462.45 after the Financial Times reported May 5 that the luxury conglomerate is weighing the sale of multiple brands—a historic reversal for a company built through four decades of relentless acquisition. The potential divestitures, including Marc Jacobs and Fenty Beauty, would mark one of the biggest downsizing moves in the group's nearly 40-year history.
The Shopping List Reads Like a Spring Cleaning
Moët Hennessy, LVMH's worst-performing division, is in talks with potential buyers about selling assets such as the Eminente rum brand and the Joseph Phelps vineyard in California.
The group is also considering selling beauty brands Make Up For Ever and Fresh, its 50% stake in Fenty Beauty—which JPMorgan values between $1.7 billion and $2.5 billion—and held talks with Authentic Brands Group about selling Marc Jacobs for around $1.1 billion, though that deal fell through.
Total proceeds could reach several billion dollars to reinvest into core businesses.
Some of These Brands Were Already Bleeding Money
Both Make Up For Ever and Fresh are loss-making brands within LVMH's beauty portfolio; Make Up For Ever in particular has recorded losses for the past eight years with annual net sales of around €300 million. Shedding money-losers directly improves the group's 23.1% operating margin and frees management bandwidth for powerhouses like Dior and Louis Vuitton.
This Is About Focus, Not Desperation
Despite the portfolio review, LVMH remains financially robust, with limited debt and more than €11 billion in free cash flow last year.
For LVMH, beauty revolves around two poles: Dior as the creative and productive pillar, and Sephora as the global distribution infrastructure—everything else is considered peripheral. That clarity explains why even a profitable brand like Fenty can be deemed non-core.
The Luxury Slowdown Forces Everyone to Choose
The divestment by large groups is largely linked to the global slowdown in the luxury sector and uncertain macroeconomic context, forcing portfolio restructuring.
LVMH, Kering, and Richemont are all re-examining brand portfolios and store networks as weak first-quarter results deepen concerns about luxury's downturn.
The market's modest applause—shares up but well below the €520 resistance analysts cite—suggests investors approve of discipline but want proof the slimmed-down empire can reignite growth. With €84.7 billion in 2024 revenue growing at just 1% organically, the real test is whether subtraction eventually leads to multiplication.