LVMH sold more handbags and leather goods in the third quarter, although there was still a sharp decline in the duty-free and cosmetics segments. The luxury holding company sees “encouraging signs of recovery”.
Does not compensate enough
There was renewed growth in Asia and clear recovery in the United States, sees luxury group LVMH after the end of the third quarter. The “encouraging signs of recovery” already seen by the Louis Vuitton mother in June have now been confirmed in all regions.
As a result, the world’s largest producer of luxury goods achieved comparable sales growth of 12% in its fashion and leather goods business, with the Louis Vuitton and Dior brands as its strongholds. The division generated sales of 5.9 billion euros, far outperforming the 1% decline in sales analysts expected, writes the Financial Times.
However, it was not enough to compensate for the weak sales in the duty-free, cosmetics, watches and jewellery segments. As a result, total comparable sales in the past quarter were still 7% lower than a year earlier, at 11.96 billion euros. Analysts had predicted a 10% decline.
Staying vigilant
In the first nine months of this year, LVMH’s turnover fell by 21% on a comparable basis to 30.3 billion euros, but Vuitton owner Bernard Arnault nevertheless talks about a significant improvement in the third quarter. Due to continuing uncertainty, the luxury home remains vigilant, both in terms of cost savings and investments.
The corona pandemic hit everyone in the luxury sector hard: analysts expect sales in the sector to fall by 30% this year and it will take up to three years for sales to fully recover. Precisely for this reason, much depends on the trial between LVMH and the American jeweller Tiffany, which will start on 5 January. The French want to escape the 16 billion dollar acquisition.
