When LVMH’s chief executive officer was seen striding through the Trump Tower lobby on Monday, the fashion industry held its breath. Bernard Arnault runs the world’s largest luxury-goods company -- a sprawling empire that includes Louis Vuitton, Fendi and Givenchy -- and here he was meeting with a president-elect who has threatened to roil the industry with trade restrictions. Following Arnault’s sit-down with Trump, LVMH said the French company was considering expanding its production in the U.S.
The encounter underscores an agonizing moment for apparel makers, most of which had written off America as a major source of production. A whopping 97 percent of clothes sold in the U.S. is manufactured in other countries, but Trump has threatened to rip up trade agreements and impose tariffs in a bid to bring domestic jobs back.
That’s led many clothing giants to freeze their overseas expansion plans -- and at least pay lip service to the idea of making more of their wares in America.
“You’re not going to have a big expansion until you know what’s going to happen,” said Julia Hughes, president of a fashion industry association that represents names such as Ralph Lauren Corp. and Under Armour Inc.
LVMH already has a factory in San Dimas, California, where it has made Louis Vuitton products for 25 years. The company is considering expanding that plant, as well as opening another facility in the South or Texas. But the decision has more to do with meeting local demand, said Sonia Fellmann, a Paris-based spokeswoman.
“The success of Louis Vuitton in the American market makes it necessary to increase production capacity,” she said. “The location has not been decided.”