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The global fashion business journal

Sep 18, 202010:00pm

Trump vs Arnault, Pinault and Dumas: 15 billions at risk in the US

This week, the president of the United States, has announced that he will set additional tariffs up to 100% for certain French products, including bags and cosmetics.

Dec 6, 2019 — 9:00am
C. J.
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Trump vs Arnault, Pinault and Dumas: 15 billions at risk in the USA

 

Trump threatens France by building a wall to keep away Birkin, Kelly, Speedy and Neverfull bags. The president of the United States said he would set additional tariffs up to 100% for certain French products, including bags and cosmetics. The measure could affect the fashion business that moves more than 15.0 billion dollars.

 

If tariffs eventually applied, these would beat down the heart of European fashion, especially the luxury sector that holds the United States as one of its major international markets.

 

One of the most affected groups by the new tax would be LVMH. The French luxury conglomerate sells around 3.7 billion dollars (3.3 billion euros) in the United States in clothing and leather goods, including bags. Moreover, the giant earns 1.1 billion dollars (974 million euros) in the country for the sale of cosmetic products.

 

 

However, the conglomerate keeps an ace up its sleeve: its new factory in New Hampshire, which put into operation two years ago. Specialized in the manufacture of bags and leather goods, Donald and Melania Trump came along with Bernard Arnault to the opening of the facility.

 

In addition, the group has just sealed the largest trading transaction in its history. At the end of November, LVMH sealed the purchase of Tiffany in an investment valued at 16.2 billion dollars.

 

Kering, on its behalf, has a turnover of 3 billion dollars (2.7 billion euros) in America, including the entire category of products and brands. In the territory, United States holds 89% of sales, which means that the conglomerate has a turnover of 2.7 billion dollars (2.4 billion euros) in the country.

 

The owner of Gucci, Bottega Veneta and Saint Laurent has also reinforced its presence in the country in the last months with the implementation of new offices, located in the Secaucus (New Jersey).

 

Arnault and Trump

 

Hermès, on its part, closed the last exercise with a turnover of 1.2 billion dollars (1.1 billion euros) in the American market, including the line of bags and cosmetics. The group has a wide presence in the country with twenty-seven own points of sale.

 

Moreover, the French company has several alligator farms for the manufacture of leather goods. The majority of the farms are located in the state of Louisiana. Altogether, the manufacture of articles for this category is done in France, therefore the tariffs would penalize exports of the company.

 

The French cosmetic giant L’Oréal will also be one of the most impaired groups by the new Trump tariffs. The group’s turnover in 2018 reached 8.1 billion dollars (7.2 billion euros) in the market, which translates into 26.9% of its total sales.

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