Fashion giant overshadowed by train accident near Machu Picchu 🚞

The train accident near Machu Picchu, which was widely reported in the media on Tuesday, is more than just a local incident; it is a potential image crisis for LVMH (MC.FR), one of the most powerful luxury brands in the world. The death of one person and dozens of injured passengers on a route that the group promotes as a "top-of-the-line" journey is a scenario that no management team is prepared for. For LVMH, owner of Belmond, the exclusive travel operator whose train crashed, the news potentially damages the company's image in the eyes of consumers.

The tragedy occurred on December 30, 2025. Two trains collided head-on on a narrow railway line at the foot of Machu Picchu. One of the trains belonged to PeruRail (an operator affiliated with LVMH), the other to Inca Rail (affiliated with the Carlyle Group). The line has only one track, which means that trains traveling in opposite directions must stop at designated locations and wait for the other to pass. According to Belmond, the Inca Rail train did not stop where it should have, continued to travel on an unauthorized section of the track, and collided about 400 meters further on. Inca Rail denies fault, saying it is too early to draw conclusions. For Machu Picchu, a site that attracts over a million tourists a year and is a major source of income for Peru's tourism industry, this is a shock at a time when the market is just recovering from the pandemic.

LVMH controls Belmond, which in turn owns a 50% stake in PeruRail (the operator of the train that had the accident). On the other side of the accident is Inca Rail, in which the Carlyle Group, a private equity giant, holds a majority stake. Belmond accuses Inca Rail of running its train on an unauthorized section of track.

For investors, LVMH, this means several things. Firstly, liability risk. If Peruvian courts find Belmond/PeruRail guilty of poor traffic management on the tracks, the fines could be significant. Secondly, reputational risk. LVMH luxury is primarily about safety, exclusivity, and perfect service. An accident with fatalities completely undermines this.

LVMH (MC.FR) shares resumed trading after the New Year break with moderate declines, but at this point it seems that the incident in Peru will not be decisive for the entire holding company. However, this does not change the fact that in the world of luxury experiences, it may damage the image of the company as it rebuilds its position.

You can find more information about LVMH in our 2026 report, where we took a closer look at this company.

From a technical perspective, LVMH broke above the barrier set by the 200-week EMA (gold curve on the chart), which may indicate that the company's shares have returned to a long-term upward trend not seen since March 2025. Importantly, however, the RSI indicator for the 14-week average rose above the 70-point zone, which may indicate the rapid nature of recent increases, giving rise to the possibility of downward corrections in the current upward trend. Source: xStation