Fashion overtakes food on European stock markets

French luxury goods group LVMH is now the biggest company on European stock markets, ahead of Swiss food giant Nestle, owing to resilient Asian sales last year, data showed Wednesday.

LVMH's market capitalisation reached 271 billion euros ($328 billion) in midday trading, putting it ahead of Nestle's 265 billion.

LVMH is comprised of the leather goods maker Louis Vuitton and champagne and spirits group Moet-Hennessy, but it also owns brands such as Kenzo, Guerlain, Fendi, Celine, Chaumet, Sephora and Bulgari.

Its most recent high-profile acquisition is the US jeweller Tiffany.

LVMH shares were pummelled in February and March 2020 when the coronavirus pandemic hit, but by early November they had bounced back, and finished the year with a gain of almost 24 percent at 510.90 euros.

Since January 1 they have risen by almost five percent more.

Regis Begue, senior trader at Lazard Freres Gestion, told AFP that once it became clear Asia would weather the Covid-19 outbreak better than other parts of the world, luxury stocks went on a tear.

Luxury groups with a strong presence there enjoyed "an exceptional market ride," Begue said.

Another trader, Arnaud Cadart at Flornoy, told AFP that LVMH's rise to the top of the market capitalisations "is a kind of consecration" for the company.

The group registered 34 percent of its sales in Asia last year, compared with 24 percent in the United States, and has managed to boost online sales as visits to its various shops declined.

"LVMH products are also ones you treat yourself to. And a large amount of savings was accumulated by wealthier groups that were somewhat spared by the crisis," Cadart said.

"A Vuitton bag or Christian Dior outfit is something that could replace the trip or restaurant you could not do in 2020," he remarked.