By and  on March 3, 2006

PARIS — Boasting that LVMH Moët Hennessy Louis Vuitton is "light years ahead of the competition," Bernard Arnault announced a 21 percent jump in 2005 net profits to 1.44 billion euros, or $1.79 billion, as sales of Vuitton denim handbags and Dom Perignon champagne accelerated at yearend.

The luxury titan also took a few veiled potshots at rival Gucci Group — and dampened speculation the world's largest luxury group might be gearing up for another acquisitions spree.

"We will be cautious in this respect," Arnault said. "Before buying a company of any significance, one has to make such an acquisition in the interests of shareholders."

During a 40-minute address Thursday to an auditorium packed with analysts, the bullish LVMH chairman and chief executive officer touted a bright economic environment worldwide, with European monetary policy characterized as a bigger potential menace than avian flu.

Arnault said the group continues to record double-digit revenue gains this year and has already set an objective of "very significant growth" for results in 2006.

"We are headed for a year of strong growth," he said. "We continue to improve our market share in all countries where we are present."

All business groups within LVMH saw profits accelerate: 12 percent to 1.47 billion euros, or $1.83 billion, in fashion and leather goods; 7 percent in wines and spirits to 869 million euros, or $1.08 billion; 46 percent in selective retailing to 347 million euros, or $432.1 million; and 15 percent to 173 million euros, or $215.4 million, in perfumes and cosmetics, and more than fivefold in watches and jewelry to 38 million euros, or $47.3 million. All currency conversions were made at average exchange rates for the year.

The results, ahead of analysts' expectations, sent shares of LVMH up 3.7 percent to close at 79.35 euros, or $93.63, at current exchange, on the Paris Bourse.

At the meeting Thursday, Arnault spent much of his time trumpeting the group's star brands, particularly the high-flying cash cow Louis Vuitton, and its most profitable brand, Dom Perignon, which had strong demand for its 1998 vintage, backed by a sexy ad campaign shot by Karl Lagerfeld.

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