Slower growth LVMH despite very strong retail performances

Slower growth LVMH despite very strong retail performances

French luxury company LVMH had a rise in sales of 6% to 6.95 billion euro in the first quarter of 2013. That is significantly less than in the same quarter a year ago, when the parent company of Louis Vuitton succeeded in boosting its sales with no less than 25%.

‘Selective Retailing’ strongest grower

The quarterly sales of LVMH are in line with expectations, but the results of the fashion and leather goods branch were disappointing (+3% on a comparable basis). With brands such as Louis Vuitton, Fendi and Céline that branch is still the largest activity of the company, worth sales of 2.38 billion euro.

 

Right on their tail however is Selective Retailing: the branch including tax-free chain DFS and chain of perfumeries Sephora signs off on the biggest growth (+17%) and has quarterly sales of 2.212 billion euro.

 

“DFS recorded an excellent performance driven by continued growth in Asian tourism despite a decline in expenditure from Japanese tourists resulting from the weaker yen”, LVMH says. Sephora gained market share on all of its markets and is continuing its global expansion, with among other the recent opening of a location in Shanghai, the largest in China (photo).

 

The wines & spirits department (Hennessy, Glennmoragie…) grew by 7% and is coming nearer to the milestone of one billion euro in sales.

 

Slight drop “watches & jewelry”

The other departments of LVMH seem to suffer from the economic crisis a bit more. Sales of the Perfume & Cosmetics branch (Christian Dior, Guerlain…) rose by only 3.7% to 932 million euro and the watches & jewelry department is struggling even more: a growth of only 2% on a comparable basis: in total there was even a drop in sales of almost one percent to 624 million euro.

 

“In an economic environment which remains uncertain in Europe, LVMH will continue to focus its efforts on developing its brands,” the world’s largest luxury goods company said in the statement, which was released after markets closed. It will also “maintain a strict control over costs,” it said.

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