FRANCE. LVMH Moët Hennessy Louis Vuitton’s profits from recurring operations grew by +13% last year to €5.9 billion, with double-digit revenue growth for Louis Vuitton and a strong performance by DFS in Asia cited among the successes in 2012.
The luxury goods conglomerate’s recorded revenues hit €28.1 billion in 2012, up +19% on the previous year (+9% organic growth), with all business groups experiencing “excellent momentum in Europe, Asia and the United States”.
LVMH Chairman and CEO Bernard Arnault said: “2012 was another remarkable year for LVMH, especially in the context of the economic slowdown in Europe. All of our businesses demonstrated excellent momentum driven by innovation and the quality of their products, thereby strengthening their positions in traditional markets while continuing to develop in new ones.
“Looking beyond the appeal of our brands, it is the talent of our teams and their motivation that enables us to so effectively execute our strategy. In 2013, LVMH intends to further strengthen its global leadership position in high quality products by relying on its sound, long term strategy.”
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Revenues within the Selective Retailing division, which includes DFS, were up +22% (+14% on an organic basis), to €7.9 billion. Profits from recurring operations within the division were up +19% to €854 million.
LVMH highlighted the strengthening of the market position of DFS, adding it had “benefitted from momentum among Asian customers”.
“DFS once again reported strong growth in both sales and profits, buoyed by solid momentum from its Asian clientele, and particularly in Hong Kong and Macao. Three major concessions were won at Hong Kong airport in 2012, and DFS saw its concession renewed at the Los Angeles airport, which underwent a major upgrade,” it said.
“The opening of a third Galleria in Hong Kong’s Causeway Bay neighbourhood enabled DFS to expand its presence in this high-potential tourist destination.”
“While continuing to benefit from an expanding Asian clientele, DFS remained focused on diversifying both its customer base and its geographical coverage. It continued with its strategy of upscaling across all destinations, renovating existing stores and bringing in new luxury brands aimed at strengthening the vitality and appeal of its product range.”
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In its outlook for 2013, the company said DFS would benefit from a full year of activity at its new Hong Kong airport concessions and would continue work to extend and renovate its stores.
“DFS’s appeal will be heightened by the installation of new facades for its Gallerias and the development of innovative marketing and service programs. The completion of renovation work at the Gallerias in Macao, Hawaii and Singapore Scottswalk will enable the business to enhance its product range.
“DFS will continue to look out for opportunities to diversify both its customer base and its geographical coverage.”
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OTHER DIVISION HIGHLIGHTS
Wines & Spirits
“The Wines & Spirits business group recorded organic revenue growth of +11%, with profit from recurring operations up +14%. Continuing the favourable trend for the wines and spirits market in 2011, demand remained strong in 2012. In addition to volume growth, improved product mix and a policy of adjusted price contributed to this excellent performance. Champagne recorded a strong performance in its rosé and prestige vintages. Sparkling and still wines from Estates & Wines experienced strong new growth. Hennessy Cognac saw a very good year for all its qualities and in all regions. Belvedere vodka enjoyed good momentum outside the US while the single malt whiskeys Glenmorangie and Ardbeg recorded rapid increases in their key markets. All maisons in this business group thus benefit fully from their value enhancing strategy, based on the image of their brands and the strength of their distribution network.”
Fashion & Leather Goods
“The Fashion & Leather Goods business group recorded organic revenue growth of +7% in 2012. Profit from recurring operations increased by +6%. Louis Vuitton, which had another record year, increased its lead over other artisanal brands of leather goods. With double-digit revenue growth, Louis Vuitton maintained its historic strategy based on the extraordinary quality of its products and its excellent distribution. The Maison continues to record an exceptional level of profitability in a context of sustained investment dedicated to strengthening its savoir-faire.
“The opening of its first dedicated jewellery boutique complete with its first Haute Joaillerie workshop at Place Vendôme in Paris and the reopening of the Maison Louis Vuitton in Shanghai are among the highlights of the year. Fendi continued the qualitative expansion of its distribution network. Its iconic handbag Baguette experienced a record year on its 15th anniversary. As the brand continues to strengthen its identity, Céline showed excellent performance in all its products and in all geographic areas. The performance of the other fashion brands continued to improve.”
Perfumes & Cosmetics
“The Perfumes & Cosmetics business group recorded organic revenue growth of +8%. Profit from recurring operations increased by +17%. Parfums Christian Dior saw excellent performance driven by the strength of flagship lines, notably Miss Dior and J’adore. Dior Addict Lipstick confirmed its leadership position in its main markets and the skin care line Prestige continued its sustained growth. Guerlain continued to see strong growth momentum attributed notably to the performance of its new fragrance La Petite Robe Noire. Parfums Givenchy saw strong growth in its makeup line due to broader distribution and the success of its mascara Noir Couture. Benefit, Make Up For Ever and Fresh continued their strong growth.”
Watches & Jewellery
“The Watches & Jewellery business group recorded organic revenue growth of +6% in 2012. Profit from recurring operations rose +26% notably due the performance of Bulgari, consolidated as of 30 June 2011. LVMH watch brands experienced good momentum supported by many innovations and the excellent performance of their iconic models Carrera by TAG Heuer, King Power by Hublot and El Primero by Zenith. In Jewelry, Bulgari confirmed the success of its Serpenti and B.Zerol collections, enriched by new creations, and reinforced the quality of its distribution. Chaumet and Fred continue to develop their star collections.”
Selective Retailing
“Sephora continued to achieve an excellent level of performance and made market share gains across all its regions. Online revenue is growing strongly. In Europe, new stores opened for the first time in Denmark and Sweden. In the United States, the renovation of several flagship stores in New York strengthened the appeal of the brand. Sephora continued its expansion in China while accelerating the renovation of its existing network. Its first stores were opened in the high potential markets of Brazil and India.”
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