INTERNATIONAL. DFS Group is sequentially reducing its losses thanks to a series of cost-cutting measures and streamlined operations but it is yet to break back into the black. That was the message from majority owner LVMH Moët Hennessy – Louis Vuitton’s post-Q2 earnings call late last week.
As reported, LVMH’s Selective Retailing business group, which includes DFS (co-owned by DFS Co-Founder Robert Miller), posted €8,620 million in revenues, flat on a reported basis but up +2% in organic terms. Profit from recurring operations climbed +12% in the half, with specialist beauty chain Sephora the key contributor.
“The losses are narrowing,” said LVMH Chief Financial Officer Cecile Cabanis. “We are still not break even, but the work that has been done by the teams is very important in terms of putting the cost under control and closing a few destination Gallerias. So we are going towards break even, but we are not there yet.
“Selective Distribution delivered a very good performance driven by Sephora, which is growing both in revenue and profits and very tangible efforts to reduce the losses at DFS,” Cabanis said.
LVMH also noted weak travel retail demand in Hong Kong and the DFS heartland of Macau but a good performance in Japan, especially in Okinawa, where the business marked its 20th anniversary.
As reported, DFS is to close its operations in Sydney, Auckland and Queenstown, marking the travel retailer’s exit from the Oceania market. The company said the move is aligned with its broader strategy to optimise global operations. As noted above, the company is also closing its long-established Chinachem store in Hong Kong.
These moves form part of an ongoing review of the company’s global store network revealed by Chairman & CEO Ed Brennan in an interview with The Moodie Davitt Report last November. ✈
