French luxury goods companies LVMH Moët Hennessy - Louis Vuitton Société Européenne and Kering SA have reversed decisions to place staff on the country's emergency government assistance scheme, the Financial Times reported April 7, citing internal emails and documents.
LVMH and Kering both informed workers they would be put on the state aid program due to the impact of the coronavirus pandemic, and LVMH had already begun the process, the Financial Times said. However, the pair have now changed course after rivals Hermès International Société en commandite par actions and Chanel SA said they would not seek government support in a spirit of "national solidarity."
France's partial activity scheme enables companies to put workers on reduced hours or to temporarily lay them off, using state finances to cover their salaries.
Kering and LVMH did not immediately respond to requests for comment from S&P Global Market Intelligence.
LVMH said it expects first-quarter revenue to fall by 10% to 20% year over year due to the coronavirus outbreak, while Kering projects a 13% to 14% revenue drop on a reported basis, or about 15% in comparable terms.