For the first time since 2017, the world's largest luxury conglomerate is slipping outside the ranking of Europe's ten most valuable listed companies, marking a dramatic reversal for a titan that once spearheaded the continent's post-pandemic market surge. The shift comes as persistent weakness in high-end spending, particularly in China, continues to erode the group's market valuation.

Shares in the company tumbled 2.5% on Tuesday, pulling its market capitalization down to €201 billion ($232 billion). Crucially, this placed the group, steered by billionaire Bernard Arnault, behind cosmetics giant L'Oreal for the first time in years, consequently knocking it out of the region's top ten club. At its peak in 2023, it had been Europe's most valuable company, with its stock trading above €900 per share.

Since that high point, the stock has sunk by approximately 55%. "Anyone claiming that Europe is back is wrong; what LVMH is telling us is that its primary growth engine—luxury—has stalled," commented Vincent Juvyns, chief investment strategist at ING in Brussels.

The problems are multifaceted. Demand for luxury goods has weakened in the crucial Chinese market, while recent Middle East conflicts have further dampened consumer traffic in key shopping destinations. Adding to the headaches, a trademark dispute involving the group's most profitable brand, Louis Vuitton, has triggered consumer boycotts in China, deepening its woes in that vital region. Consequently, several brokerages have downgraded the stock's rating and cut their price targets.

For the year alone, the luxury heavyweight's shares have crashed roughly 37%, now trading at levels last seen during the pandemic lockdowns when stores worldwide were shuttered. The magnitude of this decline rivals the selloff experienced during the global financial crisis. According to the Bloomberg Billionaires Index, Arnault dropped out of the world's top ten richest people last week, leaving the list dominated exclusively by US billionaires, primarily from the tech sector.