PARIS — Christian Dior SA — the company that holds Christian Dior Couture as well as a controlling stake in LVMH Moët Hennessy Louis Vuitton — sailed through its general assembly Tuesday, passing 24 resolutions in rapid succession.
With president Bernard Arnault and his family maintaining a 70 percent stake and 84 percent of voting rights at the company, shareholders who gathered at the Carrousel du Louvre had little possibility of contesting the board’s proposals — which included a share buyback of 300 million euros, $333 million at current exchange rates, and renewing the compensation agreement for Dior’s chief executive Sidney Toledano.
One, however, took the floor to ask how much money Dior was spending for the brand’s numerous celebrity ambassadors, which include Marion Cotillard, Natalie Portman, Jennifer Lawrence, and Rihanna.
“The compensation for these women is confidential,” Dior chief executive Sidney Toledano answered. “Investors will have to trust the directors of the brand to make sure there is a return on investment for this sort of operation.”
Another attendee asked if Donald Trump’s election would have an effect on Dior SA’s performance in the U.S., which currently accounts for 26 percent of the group’s sales.
Toledano declined to make predictions, and simply commented that the U.S. remained an important market where the group enjoyed solid growth.
The group’s annual report, published Oct. 28, showed 37.97 billion euro, or $42.14 billion at average exchange rates, in sales for the fiscal year ending June 30, 2016, with organic growth at 4.6 percent. The group’s 40.9 percent stake in LVMH accounted for 95 percent of those sales, with 1.85 billion euro, or 2.05 billion dollars, in sales at Christian Dior Couture making up the rest.
Christian Dior Couture, which encompasses the brand’s apparel, accessory, and jewelry businesses — the perfume and cosmetics line are exercised under the LVMH umbrella — reported an 8 percent drop in operating profit for the 2015-2016 fiscal year, despite a 5 percent increase in sales.
Financial director Florian Ollivier attributed the drop to amortizations and investments in stores — including new U.S. locations in Washington, D.C., San Francisco and Miami. He said EBITDA for the company was up slightly on the year.
The profit slump at Dior didn’t stop operating profits for the holding from climbing to 6.8 billion euros — up 8 percent on the year — thanks to strong revenues across a number of business areas at LVMH.
The continued profitability of Louis Vuitton as well as strong performance by Kenzo and Céline were drivers of LVMH’s growth in fashion and leather goods, the company said, while a comeback for Hennessy in the Chinese market helped boost the group’s wine and spirits division.
Following the departure of designer Raf Simons from Christian Dior in October 2015, the house presented a fall 2016 collection in March that had been realized by the studio with no artistic director to sign it. The new director, Maria Grazia Chiuri, showed her first women’s ready-to-wear collection in September.
Investors voted their continued approval for Toledano’s compensation package from Christian Dior SA, which paid out 2.4 million euro plus 1.5 million in stock during fiscal year 2015-2016.
The previous year, Toledano was paid 9.7 million euros plus stock — the difference owing to irregular payments under a “medium term” incentive plan that shareholders voted to keep in place.
Dior has seen a jump in sales in the quarter following the fiscal year captured by the annual report, HSBC Global Research said in a note Monday. Dior has outperformed the luxury sector, analysts Antoine Belge and Erwan Rambourg wrote, and uneven sales are more likely due to broader fluctuations in the luxury market than designer changes.
“[T]he Q3 16 rebound (sales up 8% organically) was achieved with products which had not yet been designed by [Grazia Chiuri],” HSBC said.
The bank projected organic sales growth for the group at 7 percent per year for 2017 to 2019.