Slower growth LVMH despite very strong retail performances

‘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.