LVMH stock falls 1.6% as Italy puts Loro Piana under court control
The Milan court ruling alleges labor exploitation and unsafe working conditions linked to third-party suppliers used by Loro Piana in Italy
As of July 14, LVMH stock is trading at €480, down 1.6% over the past 24 hours.
The stock has been trending sideways in recent weeks, oscillating between a support level at €470 and a resistance band near €500.
Highlights
- LVMH stock is trading at €480, down 1.6% as legal action against its subsidiary Loro Piana raises compliance concerns.
- Technical indicators show weakening short-term momentum, with key support at €470 and resistance near €500.
- Broader reputational risks and upcoming earnings will be critical in determining near-term price direction.
This range-bound movement follows a broader recovery seen since mid-May, when the price rebounded from a yearly low near €455. Technically, the 50-day moving average is trending slightly above the 200-day average, suggesting a mild bullish bias in the medium term. However, the recent breakdown in daily momentum indicators such as RSI and MACD suggests weakening short-term strength, especially with volumes beginning to decline after peaking in late June.
If the €470 support level fails, LVMH could face increased selling pressure, potentially targeting the €455–€460 range. On the upside, any sustained close above €500 would be a technical breakout and could signal a rally toward €520, a level last seen in late April. Still, without new bullish catalysts, price action is likely to remain capped below €500 as markets digest both macroeconomic uncertainty and company-specific developments.
LVMH stock price dynamics (May 2025 - July 2025). Source: TradingView
The current consolidation phase also reflects investor hesitation following a volatile first half of the year, during which LVMH underperformed broader European indices. The stock's beta relative to the CAC 40 has increased slightly, indicating a higher sensitivity to market swings. This suggests that any macro or regulatory trigger could prompt outsized price reactions. Traders should also note that implied volatility in LVMH options has risen in the past week, pointing to heightened uncertainty around the stock’s near-term direction.
Market context and reputational risk
The key development affecting LVMH this week is the court-ordered administration of its luxury subsidiary, Loro Piana, by an Italian judge on July 14. The Milan court ruling alleges labor exploitation and unsafe working conditions linked to third-party suppliers used by Loro Piana in Italy. While the court did not accuse LVMH of direct wrongdoing, it cited the company’s failure to properly supervise its outsourced supply chain, which was previously flagged in oversight agreements.
This is the latest in a string of reputational challenges for high-end fashion houses operating in Italy. In 2023 and 2024, similar allegations affected Dior and Armani. Dior, another LVMH brand, was previously under judicial supervision until February 2025, when the court lifted controls after compliance measures were introduced. However, the re-emergence of similar issues at Loro Piana raises questions about the effectiveness of LVMH’s internal audit and oversight mechanisms.
The timing of the court action is particularly sensitive. Investors have grown increasingly concerned about ESG compliance risks, and European regulators have signaled tighter scrutiny for luxury firms benefiting from Italy's industrial districts, where subcontracting often involves informal labor networks. While LVMH remains financially strong—with 2024 net income of €12.6 billion and first-quarter 2025 revenue at €20.3 billion—investor sentiment could shift if legal exposure broadens or if credit rating agencies initiate ESG-related reviews.
LVMH near-term scenarios
In the short term, LVMH is likely to remain under pressure from the Loro Piana court action, though the impact should be limited unless further subsidiaries come under scrutiny. The base-case scenario sees the stock stabilizing between €470 and €495 in the coming 2–4 weeks, with technical support holding unless additional negative news emerges. If the company provides clarity on corrective measures or announces enhanced compliance protocols, the stock could retest €500 and possibly push toward €515 by mid-August.
A more optimistic scenario—such as early resolution of the Loro Piana investigation or a strong earnings beat—could lift the stock toward €530. This would require confirmation that reputational risks are contained and that demand from key markets remains resilient. On the downside, a failure to address supply-chain oversight risks or negative headlines affecting other subsidiaries could send the stock down to €455, marking a full technical retracement of the recent rally.
LVMH’s lagging technical performance reflects broader headwinds in the luxury sector, including slowing demand. Meanwhile, Hermès has overtaken LVMH as France’s most valuable company, fueled by robust earnings and resilience in the ultra-luxury market.
