In the battle of luxury powerhouses, Hermès has come out on top—for now, at least.

The French fashion house’s market capitalisation hit US$276.3 billion (€243.65 billion) on Tuesday, surpassing LVMH Möet Hennessy Louis Vuitton SE’s valuation of US$274.5 billion (€243.44 billion). That figure places Hermès in the No. 3 spot on the list of the largest listed companies in Europe, trailing behind software brand SAP SE and weight-loss drug supplier Novo Nordisk A/S, Bloomberg reported. It also makes the maison the most valuable company in France, according to the nation’s CAC40 stock index—as well as the world’s most valuable luxury company, according to The Wall Street Journal.

The shakeup comes in the wake of LVMH’s poor performance in Q1, where the brand saw a 3 percent decline in sales—falling below analysts’ projected 2 percent growth over the same period, Reuters reported. The drop was the result of sluggish demand in the U.S. and China, as well as the looming threats of tariffs and their threatening presence over the luxury market. As a result, the conglomerate’s shares fell over 8 percent.

“Hermès is seen as more resilient in certain environments, which are more uncertain, and that’s exactly what is happening right now,” Jelena Sokolova, an analyst at Morningstar, told Bloomberg.

That market value is something of a victory for Hermès. In 2015, LVMH CEO Bernard Arnault sent shock waves through the luxury sector when he announced that he had acquired a stake in the Birkin bag maker, Bloomberg reported. In response, the Hermès family came together and eventually drove France’s richest man to sell his shares in the company.

Something that’s helping Hermès is the exclusivity of its products. Most notable, of course, are handbags like its Birkin and Kelly, demand for which far surpasses supply.

Many high-end brands, including LVMH, have suffered over the past year in the face of a luxury slowdown that has plagued the sector—though the Arnault-helmed conglomerate did net a better-than-expected US$88.27 billion in 2024, a growth of 1 percent from 2023. As for Hermès, the maison has been bucking the trend, seeing an 11.3 percent increase in sales in Q3 last year and whipping up about US$15.9 billion (€15.2 billion) in revenue in 2024 overall—a 13 percent increase from the year prior.

As for how the luxury brands will fare in 2025, we’ll just have to wait and see.