Good times are rolling at LVMH, the parent company to fashion power houses Louis Vuitton, Dior, Fendi, Gucci and more. In its third quarter financial statement issued yesterday, the company reported a 4% increase in revenue in the first nine months of the year, reaching €26.3 billion (roughly US$29 billion). The third quarter in particular enjoyed accelerated growth with an increase of 6% in organic revenue growth.
Within their fashion and leather goods business group, which saw a 2% organic revenue growth, the Louis Vuitton brand remained strong due in part to the launch of the new Horizon luggage, a category LVMH is looking to expand with the acquisition of a majority stake in German Maison, Rimowa, the global leader in high quality luggage, due to be completed in January 2017.
Other fashion and accessory hits were Fendi, Céline, Loewe and Kenzo, who also experienced good growth. While Marc Jacobs continued the repositioning of its collections and an agreement was announced for the sale of the Donna Karan business.
With even stronger numbers, the watches and jewelry division recorded organic revenue growth of 4%. Leading the group was Bvlgari, who continued to gain market share charged by major creative momentum, including the recent launch of Serpenti Seduttori.
Other standouts in this category were TAG Heuer and Hublot, who continued the development of its iconic lines, Classic Fusion and Big Bang.
The welcomed news comes in a particularly tough and tightening retail environment, where brick and mortar stores are dwindling along with luxury sales impacted by off-price retailers. The numbers beat experts’ expectations, including John Guy, an analyst at MainFirst Bank AG, who told Bloomberg, “Fashion and leather goods is the big mover, though perfumes and cosmetics and selective retailing were also better. Clearly momentum has improved for Louis Vuitton, notably in mainland China and in spite of weak tourism flows into France.”
As Guy points out, location also plays a big part in the report, with Asia (minus Japan) boasting a major improvement during the third quarter and steady, strong sales throughout the U.S. and Europe. The company said in the same statement that it will continue targeting those markets, “In an uncertain geopolitical and currency environment, LVMH will continue its strategy focused on innovation and targeted geographic expansion in the most promising markets.”
— Christine Galasso