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French Stocks Defy Civil Unrest As Luxury Brands Shielded By Global Revenues

Nationwide protests fail to dampen CAC 40 index's best weekly performance since March, thanks to international focus of luxury conglomerates.

The French stock market, as represented by the CAC 40 index, has risen for five days this week, gaining 3.3% and marking the best weekly performance since the end of March.

“This occurred despite the fact that nationwide protests have erupted in recent days, with images of burning streets and police use of tear gas capturing the attention of the world, highlighting the deep divisions and tensions within French society,” said Benzinga. 

The police shooting death of a 17-year-old boy of Algerian descent in Nanterre, a Paris suburb, sparked widespread protests across the French capital, with protesters demanding justice and an end to police brutality.

GettyImages-1376685883 (1).jpg
A pedestrian walks past graffiti which reads as ‘Justice for Nahel’ on a wall at Place de la Concorde in Paris on July 1, 2023, after continued protests following the shooting of a teenage driver in the suburb of Nanterre on June 27.  The government said the violence had “lessened” compared to previous nights, but the interior ministry still reported 994 arrests nationwide overnight, and 79 injuries among police and gendarmes. LUDOVIC MARIN/AFP VIA GETTY IMAGES

As riots ravaged the nation, over 400 people were arrested on Thursday, and a bank in Nanterre was set on fire. Over 40,000 police officers were deployed, and public transportation was strained.

All of this turmoil had virtually no negative impact on the performance of French companies in the stock market.

Why Are French Stocks Ignoring The Civil Unrest?

“The CAC 40 index, tracked by the iShares MSCI France ETF is predominantly represented by luxury brands that generate a significant portion of revenues from international markets,” said Benzinga. 

LVMH Moët Hennessy – Louis Vuitton, Société Européenne  the conglomerate of luxury product brands such as Louis Vuitton, Moët & Chandon, Hennessy, Dior, Dom Pérignon, Givenchy and others, and headed by the world’s richest man, Bernard Arnault, accounts for 14% of the CAC 40 Index.

France contributed only 8% of LVMH’s total revenues in 2022, totaling 6 billion Euros ($5.9 billion). Revenues of 21.5 billion Euros, or 27%, came from the United States, making it the second-largest market after Asia.

L’Oréal S.A., another CAC 40 heavyweight, generates only a small portion of its revenue domestically, with more than three quarters coming from outside Europe.

Thus, the international focus that characterizes French luxury brands has effectively created a protective shield against the impact of domestic political and social upheavals in the country where the brands are headquartered.

LVMH Revenues By Region In 2022


Revenue (in millions of Euros) in 2022 Share

United States – 21,542 – 27%

Asia ex-Japan- 23,785 – 30%

Europe ex-France – 12,717 – 16%

Other markets – 9,632 – 12%

Japan – 5,436 – 7%

France – 6,071 – 8%

Total – 79,184 – 100%

© 2023 Zenger Zenger News does not provide investment advice. All rights reserved.

Produced in association with Benzinga

Edited by Judy J. Rotich and Newsdesk Manager

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