Is LVMH A Holdings Company?

The market seems to partially agree thay LVMH should be trading at a discount compared to other pure-play operational luxury companies like Hermès.

The market is worried that excessive expenses will eat up the group's profits and reduce its profitability. However, the regular disadvantages of a holdings company are non-existent in LVMH. The group is extremely profitable, and the synergies it has between all its operations are more than offsetting any "unnecessary costs".

Besides，the company have obvious operational synergies,for example.the combined LVMH group has connections no other company possesses.

The group, led by Bernard Arnault, has demonstrated its incomparable ability to acquire huge brands and improve them in the course of just a few years. Most recently, Tiffany & Co. which was acquired in 2021 has seen its sales double already.

In addition, successful diversification can spread risk,Focusing on a single business makes it harder for companies to respond to market volatility, making them vulnerable to economic weekends.

So, LVMH is a holdings company but in a very good way.