LVMH Sales Powered by Fashion and Leather Goods -- Update
January 28 2020 - 4:09PM
Dow Jones News
By Matthew Dalton
PARIS -- LVMH Moët Hennessy Louis Vuitton, the luxury goods
behemoth, reported record results last year, driven by strong
growth at Louis Vuitton and Christian Dior.
Revenue rose 15% to EUR53.67 billion ($59.17 billion) and net
profit 13% to EUR7.17 billion, both record highs. All divisions
grew, led by fashion and leather goods -- including Louis Vuitton
and Dior -- where revenue surged 20%.
LVMH is the world's largest luxury goods company, and its
results are considered a bellwether of the industry as a whole. But
the Paris-based conglomerate in recent years has outperformed most
of its competitors, gaining market share.
Louis Vuitton is the world's best-selling luxury brand. LVMH
also owns the Italian jeweler Bulgari, cosmetics retailer Sephora,
cognac maker Hennessy and dozens of other brands. It struck a deal
last year to buy the American jeweler Tiffany & Co., making
LVMH the world's largest jeweler.
The company has powered through protests in Hong Kong for much
of the year, relying on its geographic diversification to serve
clients who are avoiding the city, long a magnet for luxury
shoppers.
Now LVMH is facing the threat of the Coronavirus in China, where
the government has quarantined Wuhan, the epicenter of the
outbreak. The virus has thrown the travel plans of Chinese shoppers
into turmoil just as the shopping season of the Lunar New Year has
arrived. Chinese are the luxury industry's most important
clientele, representing more than a third of global sales.
Bernard Arnault, the chief executive and controlling shareholder
of LVMH, said he had been querying his teams in China about the
impact of the outbreak.
"It's very early to have an answer," Mr. Arnault said.
If the consequences of the outbreak are felt through March,
"that wouldn't be terrible," he said. "If it lasts two years, that
would be another story."
Growth slowed somewhat in the fourth quarter, reflecting tax
issues in Japan and destocking of cognac in the U.S. The company
also wrote off stock of some smaller cosmetic brands in the
U.S.
Write to Matthew Dalton at Matthew.Dalton@wsj.com
(END) Dow Jones Newswires
January 28, 2020 15:54 ET (20:54 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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