INTERNATIONAL. LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, posted a -12% fall in profits for the first half of 2009 to €1,363 million on revenues that edged ahead by +0.2% to €7.8 billion. Group share of net profit plunged -23% to €687 million.
The worst-affected categories were wines & spirits, where profits fell by -41% year-on-year and watches & jewellery, off by a dramatic -73%.
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Source: LVMH |
LVMH said that profits increased “tangibly” in the brands that control their distribution, such as Louis Vuitton. In contrasts, it noted: “The brands distributed by third parties, on the other hand, suffered a massive destocking impact by these distributors. This is notably the case for the Wines & Spirits and Watches & Jewelry business groups.”
The group noted that the revenue increase came despite the financial crisis and a strong comparative period in 2008.
In Selective Retailing, which includes DFS Group and Miami Cruiseline Services as well as domestic retail operations Le Bon Marché, La Samaritaine and perfumery chain Sephora, sales rose +7% on a reported basis (while flat on the basis of comparable structure and exchange rates) to €2,127 million. Profit from recurring operations fell by -15% to €129 million.
Commenting on its travel retail operations, LVMH noted: “DFS continued its cost-cutting efforts in order to limit the impact of the decrease in international travel which was amplified in the second quarter by health concerns [the H1N1 flu virus -Ed].
“DFS benefited, however, from its recent store openings which are confirming their potential. The Galleria at Macao, in particular, saw sustained growth and a second site [City of Dreams, already partly open -Ed] is going to be opened on the island. The outlet at the heart of Abu Dhabi Airport has made a promising start.”
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Source: LVMH |
LVMH Chairman and CEO Bernard Arnault said: “The first half results once again demonstrate the exceptional appeal of our brands as well as the effectiveness of our strategy, particularly remarkable given the global economic crisis.
“LVMH thus proves its exceptional capacity to resist thanks to the strength of its brands, the responsiveness of its organization and the talent of its teams. Louis Vuitton has had a particularly exceptional first half of the year, probably the best in the luxury universe, with double-digit revenue growth and exceptional profitability.
“Reassured by the good resilience in the first half of the year, the Group approaches the second half with confidence. It will rely upon the creativity and quality of its products as well as the effectiveness of its teams who implement notably cost reduction measures adapted to the crisis, to pursue further development in its historical markets as well as in high potential emerging markets.”
The group also noted the “exceptional resilience of Parfums Christian Dior and Guerlain”, which it said were growing market share.
LVMH also noted its solid financial position, with a net debt ratio of 32%.
In the current economic crisis, LVMH said it will continue to gain market share thanks to numerous product launches planned before the end of the year, to its geographic expansion in promising markets and to its cost management.
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Source: LVMH |
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