LVMH becomes "cultural institute" after record-breaking 2021

2021 was another record year for LVMH, beating 2020 as well as pre-Covid 2019. The owner of famous brands like Louis Vuitton has faith in the future, but not in the metaverse – focusing on “selling culture” instead.

55 % profit rise

Both LVMH’s turnover and profit have reached record heights: net profit went up 55 % to 12 billion euros and turnover rose to 64 billion euros, 43 % more than in 2020 and still 20 % more than in 2019, the last year before Covid struck.

Performances were especially strong in North America and Asia, while Europe still struggled more with Covid restrictions. In terms of divisions, fashion and leather were the strongest performers.

CEO Bernard Arnault looks towards the future with a lot of confidence: the luxury conglomerate says it is in an excellent position to reinforce its leading position on the global luxury market.

“Metaverse is a bubble”

While the company looks towards a lot of different ways of expansion, conquering the metaverse is not one of them. Unlike competitors like Gucci or Burberry, LVMH distrusts the new virtual worlds. The somewhat conservative CEO, who earlier expressed his reservations towards Amazon (to put it mildly), warned everyone to be wary of the bubbles that are the metaverse initiatives, CNBC reports.

While relevant applications and business opportunities might come out of it, Arnault warns for caution and says further enquiries into profitability are advised. Regarding all these new fads, he only sees value in NFTs.

Not a fashion brand

Moreover, Arnault says LVMH is not scared of the skyrocketing inflation: he calls his group not just a fashion house, but a real “culturally creative company”. And that means that prices can still go up by quite a bit, within reason. Despite rising costs, LVMH’s margins still went up – meaning that sales prices rose even faster.

The luxury group now says it sells “desire” and “culture” more than it sells watches or jewellery. Flagship brand Louis Vuitton especially is said to be a cultural brand with a worldwide audience – including an important part of the Gen Z group. As evidence, Arnault gave collaborations with Beyoncé for the Tiffany & Co. marketing campaign and the posthumous fashion event to honour designer Virgil Abloh.