The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — LVMH's sales breezed past analysts' estimates as creative revamps at its Louis Vuitton and Christian Dior fashion brands helped fuel growth.
Sales of fashion and leather goods rose 20 percent on an organic basis in the second quarter. Analysts expected a 14.4 percent gain. The company’s overall sales grew 12 percent.
LVMH’s growth accelerated despite concerns about a slowing economy in China, which has been driving luxury demand. European labels are benefiting from cuts to sales taxes and import duties that are encouraging Chinese customers to visit stores at home rather than abroad.
The robust growth in the key fashion and leather division is a sign that LVMH's move to reshuffle its menswear designers last year is paying off. In his first year at Christian Dior, new designer Kim Jones has won fans by reworking the brand's classic Saddlebag for men, as well as designing leopard-print sneakers and romantic double-breasted suits. His counterpart at Louis Vuitton, Virgil Abloh, issued crocodile utility harnesses, puffer coats and runway collections rife with references to pop culture like the Wizard of Oz.
Another star designer, Hedi Slimane, took over at Celine, where he is overseeing women's collections and has added the brand's first menswear line.
Second-Richest Man
Brands' "consistently refreshed creativity" was key to LVMH's success, Chairman Bernard Arnault, who briefly overtook Bill Gates as the world's second-richest person last week, said in a statement.
While LVMH continued to see its fastest growth in Asia, Europe also accelerated as the company saw rebounding sales in France, where Yellow Vest protests in Paris dwindled.
"We see improvement across the board,” Chief Financial Officer Jean-Jacques Guiony said in a conference call with analysts. “This is not only a Chinese show."
LVMH’s first-half profit from recurring operations rose 14 percent to €5.3 billion ($5.9 billion). Margins were stable as the fashion division increased investments in marketing and the store network. "We are not milking the brands in good times," Guiony said. "It’s the right thing to do if we want to strengthen the portfolio."
LVMH reported the figures after Paris markets closed. The company’s shares have already gained 47 percent this year.
By Robert Williams; Editors: Eric Pfanner, Marthe Fourcade, Frank Connelly
In 2020, like many companies, the $50 billion yoga apparel brand created a new department to improve internal diversity and inclusion, and to create a more equitable playing field for minorities. In interviews with BoF, 14 current and former employees said things only got worse.
For fashion’s private market investors, deal-making may provide less-than-ideal returns and raise questions about the long-term value creation opportunities across parts of the fashion industry, reports The State of Fashion 2024.
A blockbuster public listing should clear the way for other brands to try their luck. That, plus LVMH results and what else to watch for in the coming week.
L Catterton, the private-equity firm with close ties to LVMH and Bernard Arnault that’s preparing to take Birkenstock public, has become an investment giant in the consumer-goods space, with stakes in companies selling everything from fashion to pet food to tacos.