Modest growth for LVMH, hit by China slower sales
The world’s luxury group LVMH has posted a moderate increase of 4 per cent in revenue to reach €21.4 billion for the first 9 months of 2014. All business groups grew except Wines & Spirits which continues to be affected by slow movement in China.
A decline by 3 per cent was recorded for the Wine & Spirits group in the first nine months of 2014. This trend reflects the cognac market in China where de-stocking by distributors continued while Hennessy benefited from an excellent momentum in the United States. The champagne business continued to perform well in the third quarter, driven by strength in the American and Japanese markets.
The Fashion & Leather Goods business group recorded an increase of 3 per cent. Louis Vuitton continued its strong momentum in innovation and creative development driven by Nicolas Ghesquière. Loro Piana remained focused on its strategy of qualitative development. Fendi and Céline made good progress and continued to expand their leather goods and footwear collections while developing their store networks. Other brands, such as Givenchy, Berluti and Kenzo, continued to strengthen their positions.
The Watches & Jewellery area of the business recorded growth of 5 per cent for the first nine months of 2014. The third quarter showed a notable acceleration in the jewellery segment, driven notably by Bvlgari, while watches continued to be impacted by the cautious purchasing behavior of multi-brand retailers in an uncertain economic environment.
Geographically, LVMH has seen an improved growth rate in Europe and the United States during the quarter compensated for the slowdown observed in Asia. We wonder what the rest of the year will hold.