Disappointing fashion sales dampens spirits at LVMH

Disappointing fashion sales dampens spirits  at LVMH

Even though the French luxury concern LVMH saw its sales rise by 19% (to 28.103 billion euro) and its net profits by 12% (to 3.424 billion) last year, several analysts were disappointed because of the results in the fashion and leather goods division.

Bulgari saves otherwise poor results

Most of LVMH's impressive revenue growth came courtesy of the acquisition of Bulgari: this lifted the watches and jewellery division to a +46% (to 2.836 billion euro), while the organic growth of the department only rose by 6%.

 

Another meagre performance was that of the fashion and leather goods division (still responsible for the majority of LVMH’s revenue), which grew 14% to 9.926 billion euro – even though only half of that growth was organic. Even worse: that growth dropped to only 5% during the third and fourth quarter.

 

CEO Bernard Arnault made it clear that Louis Vuitton, which generates the bulk of the fashion unit’s sales, will not seek revenue growth “at all costs”. The brand will improve existing stores and open “far fewer” new ones as it seeks to take more control of its future direction.

 

Spirited spirits

The wine and spirits division performed quite well, as wealthy consumers continue to increase their spending on items such as Moët & Chandon champagne and Hennessy cognac. Sales roselast year by 17% to 4.137 billion euro, accounting for a very decent 11 % organic sales growth.

 

Arnault remains optimistic for 2013, despite an uncertain economic climate in Europe. His main concern is a possible international currency war, as several economic powers attempt to keep their exchange rates low in order to boost their exports. If the euro grows even stronger against the dollar or the yen, the result will inevitably be price increases, he warns.

Questions or comments? Please feel free to contact the editors


EU and Japan agree in principle on trade deal

20/07/2017

(content provided by EuroCommerce) After more than four years of negotiation, the EU and Japan have reached a political agreement in principle on an Economic Partnership Agreement during Japanese Prime Minister Abe’s visit to Brussels. 

Register for the RetailDetail Day 2017 now

20/07/2017

Starting today, you can register for the annual RetailDetail Day, in Mechelen on 21 September. The widely varied program will bring together reputable retailers and digital innovators.

Ensuring your packaging is not past its prime

18/07/2017

By the end of 2017, almost a quarter of everyone on the planet will be over the age of 50. This represents a huge opportunity for retailers but they must be wise, particularly in regard to their packaging choices, if they want to engage this demographic.

Over 100 exhibitors at Shoptalk Europe

18/07/2017

(advertorial) Shoptalk Europe is the big, new event for retail and ecommerce innovation. It covers the transformational trends, technologies and business models reshaping how consumers discover, shop and buy in an age of digital disruption. 

European consumer remains upbeat

18/07/2017

Research firm GfK’s recent study shows that the European consumer trust keeps growing, but there are vast differences depending on the country.

Reckitt Benckiser evades taxes through the Netherlands

13/07/2017

British Reckitt Benckiser, which owns brands like Durex, Calgon and Nurofen, has evaded hundreds of millions of euros in taxes through the Netherlands according to Oxfam Novib after it studies the company’s financial results.

Back to top