(BFM Stock Exchange) – The risk of a fall in the Bayrou government has made almost all of the actions in the Parisian place bend, with a CAC 40 which lost more than 3% in two sessions. But the three luxury groups are resistant, benefiting from a notable under-exposure to France and more attractive valuations than in the past.

To say that François Bayrou has derailed the CAC 40 is the euphemism. The Prime Minister announced on Monday that he would submit his government to a vote of trust on September 8, paving the way for a potential if not likely censorship. Many political parties (rebellious France, the national rally, the Socialist Party or even environmentalists) have said that they would not vote for confidence in the context of this ballot.

“In the current state of things, the government would fall, which would open the way to a new Prime Minister, or even new legislative elections. This has therefore strengthened existing concerns concerning the deficit of France, and the assets of the country recorded a clear underperformance yesterday,” said Deutsche Bank. “The ‘political shock’ revives the French sovereign risk and regulatory and budgetary uncertainty”, for its part judged Antoine Fraysse-Soullier, market analyst for Etoro.

This return of political uncertainty abused the CAC 40 which lost more than 3.25% in two sessions (Monday and Tuesday). Banks and construction and concession groups were particularly affected. Société Générale has lost 10% in two sessions and Vinci more than 11%. This Wednesday, August 27, the CAC 40 tries to recover as it can (+0.1% around 10:45 am).

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Less in fog on customs duties

In fact, almost all sectors took the water. But a compartment has resisted: luxury. LVMH limited the breakage on Monday (-1.4%) and especially Tuesday (-0.37%). The luxury number even takes 1.6% this Wednesday, signing the highest increase in CAC 40. Hermès sailed in clear waters, backing 0.67% on Monday, 0.4% Tuesday, while its title is 0.8% on Wednesday. Kering for his part only experienced green over the week ( +0.2% Monday, +0.5% Tuesday and +1.33% this Wednesday).

“With political uncertainty, what comes back in France remains the risk of a decrease in consumption or an increase in taxation. Investors want to reduce their exposure to France and luxury groups are therefore precisely under-exposed to France,” said an analyst.

At the same time, the risks around American customs surcharges have almost disappeared, since the European Union and the United States reached an agreement bringing these customs duties to a rate of 15%in late July.

“We know the customs tariffs, we know the rules of the new game. We know that groups will have to increase their prices to repercussions and companies have had time to think about it. The only question relates to the response of American consumers to these future price increases,” added the analyst cited above.

Kering financial director Armelle Poulou told analysts at the end of July that American customs surcharge were “manageable”, in particular via price increases.

In a recent note, UBS wrote that brands will have to raise their price of around 2% in the United States or 1% worldwide to neutralize the impact on their operating profit, which is also low enough among French groups (1% for Hermès, 3% for LVMH and 6% for Kering, according to the Swiss Bank).

A turnover in France largely provided by tourists

To return to political uncertainty in France, luxury groups are actually very little exposed to France, which can lead certain investors to favor them.

In the first half of 2025, France represented 8% of total LVMH income, a rate that increases to 9.2% for Hermès. Kering for his part had not detailed the share of his income generated in France but “Western Europe” represented approximately 29% of its turnover.

“Luxury is not the sector most concerned with a degradation of the French economic environment. French customers remains very limited for French luxury groups. Easy, it represents less than 10% of the overall turnover of these groups. But at least half of this turnover is generated by tourists who buy luxury products in France. Consequently, the” real “exposure to French consumer is probably closer to a figure below 5%” a financial intermediary.

Paradoxically, political uncertainty in France, if it were to weigh on the euro against the dollar, would have positive collateral effects for luxury groups. The fall in the European motto would encourage American tourists more to buy luxury goods in Europe, which would provide sales support.

“A depreciation of the euro would be good news, but we are still very far from it, the movement (on the foreign exchange, editor’s note) was far too shy to draw conclusions,” explains the financial intermediary.

The latter points to another factor that has been able to play in favor of luxury groups in recent days: their valuations. “The sector has suffered a lot,” he recalls, adding that these lower valuations have potentially been able to “start a start of sectoral rotation”.

The entire luxury compartment has, in fact, fell in recent months, undermined by a clear slowdown in demand due to low spending among Chinese and American consumers, as well as unfavorable exchange effects. Over the 2025, LVMH action lost 22.4%, that of Hermès 9.6% and that of Kering 4.3%, the three groups underperforming the CAC 40 (+4.7% over the same period).

At the beginning of the month, Royal Bank of Canada wrote that “the valuation began (Ait) to appear attractive at LVMH while Hermès experienced a depreciation of his multiple scholarship holders”. The Canadian Bank judged that these two titles deserved to be put in the portfolio.

The previously quoted financial intermediary warns, however, that if measures unfavorable to the taxation of companies should be announced in the coming months “luxury would go to the cash register and probably more than the others”.

For example, LVMH had evaluated between 700 million and 800 million euros the impact on its profit from the temporary surcharge of corporate tax which was contained in the finance law for 2025.