The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Billionaire Bernard Arnault’s LVMH lost the latest round in its court battle against French tax officials who raided the luxury-goods firm’s Paris headquarters to gather evidence for a case.
France’s top court on Wednesday overturned a prior ruling that had deemed the 2019 inspections to be unjustified. The Cour de Cassation ordered the Paris court of appeals to reexamine the challenge brought by LVMH Moet Hennessy Louis Vuitton SE.
Wednesday’s decision revives a probe into suspicions that the firm, controlled by the world’s richest man, may have tried to lower its tax bill by pretending it carried out treasury operations in Belgium rather than France. It’s a boost for French authorities and hints at a low bar for justifying the need to carry out a tax raid.
On Wednesday, the top court ruled that mere presumptions of tax fraud are required to authorise a raid under French law. Contrary to what the court of appeals had stated in its 2020 ruling, judges said there was no need for tax officials to demonstrate that the Belgian unit didn’t have enough staff to carry out its treasury activities.
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LVMH said in a statement that the group abides strictly by rules and laws applicable in all the countries where it operates. During a 2020 hearing in the case, an attorney for the company described the evidence-gathering raids as “shockingly disproportionate.”
By Gaspard Sebag
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Bernard Arnault Signals Intent to Lead LVMH Until He Is 80
LVMH said in a filing that it will seek to raise the age limit for the chief executive officer to 80 from the current 75 at next month’s annual general meeting.
The luxury goods maker is seeking pricing harmonisation across the globe, and adjusts prices in different markets to ensure that the company is”fair to all [its] clients everywhere,” CEO Leena Nair said.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.