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LVMH Posts Record Revenues Amid China Comeback

The world's biggest luxury goods maker posted an 18 percent rise in operating income for 2017, as robust demand from China boosted sales.
Louis Vuitton store in Paris, France | Source: Shutterstock
By
  • Reuters

PARIS, France — LVMH, the world's biggest luxury goods maker, delivered better-than-expected sales growth in the fourth quarter as it benefited like many peers from a steady recovery in Asian demand.

The French company, whose 70 brands range from Dom Perignon champagne to fashion houses like Fendi and Givenchy, said sales rose 11 percent between October and December on a like-for-like basis, which strips out currency swings.

That beat the 9 percent growth expected in an Inquiry Financial analyst poll for Reuters but was a slight slowdown from 12 percent growth the previous quarter.

Demand from Asian shoppers has boosted makers of high-end handbags, clothing and watches the past year, thanks in particular to thriving Chinese demand.

Rival Richemont, which owns Cartier, reported solid appetite from the region in the last three months of 2017.

Keeping up revenue growth may become harder, however, against tougher year ago comparisons.

LVMH described the backdrop as supportive for the industry, adding it was well-equipped to grow further in 2018 "despite unfavorable currencies and geopolitical uncertainties."

LVMH, which does not break out earnings for its labels, said group operating income for the whole of 2017 stood at 8.29 billion euros ($10.36 billion), up 18 percent from a year earlier and in line with forecasts.

The conglomerate was partly boosted by the full integration of the Christian Dior fashion label. LVMH swooped last year on the couture part of the brand it did not already own, uniting it with the perfume and beauty parts of the Dior business.

Its fashion and leather goods division — motored by Louis Vuitton, which accounts for more than half of the whole group's profits — posted revenues of 15.5 billion euros in 2017, up 13 percent like-for-like.

"LVMH achieved another record year," said Bernard Arnault, chairman and chief executive. "The excellent performance, to which all our businesses contributed, is due in part to the buoyant environment but above all to the remarkable creative strength of our brands and their ability to constantly reinvent themselves."

"In an environment that remains uncertain, we can count on the appeal of our brands and the agility of our teams to strengthen, once again in 2018, our leadership in the universe of high quality products," he added.

By Sarah White and Pascale Denis; editor: Dominique Vidalon.

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