By  on June 20, 1994

PARIS -- LVMH Moet Hennessy Louis Vuitton continues to sail over the rough economies of many of its markets.

For the first five months of this year, the firm announced Friday, group sales were up 22 percent.

Reiterating a forecast he gave to analysts in March, Bernard Arnault, president of LVMH, told the annual shareholders' meeting here that given the solid sales growth, group net income will rise by 20 percent this year. He also forecast growth of "more than 30 percent" in consolidated net income for the first half of 1994.

"Nineteen ninety-three was billed as 'the year of crisis,' but we ended up doing very well. It shows the resistance of our group to the recession," Arnault said.

As reported, LVMH's net earnings before nonrecurring gains last year slipped 1.3 percent, to $533.9 million (2.97 billion francs) at current exchange. However, extraordinary gains of $108.2 million (602 million francs), primarily from last year's sale of the Roc cosmetics business to Johnson & Johnson, pushed final profit ahead 19 percent, to $641.8 million (3.57 billion francs). Consolidated sales advanced 10 percent, to $4.28 billion (23.8 billion francs).

However, it wasn't all smooth sailing.

Christian Lacroix's losses narrowed to $3.6 million (20 million francs) in 1993, down one-third from 1992, but nonetheless, it was the seventh consecutive annual loss since Arnault launched the house in 1987.

Lacroix's 1993 sales totaled $32.2 million (179 million francs), little changed from the previous year.

LVMH controls the fashion and fragrance businesses of Lacroix, Givenchy and Kenzo, Parfums Christian Dior and Guerlain, Louis Vuitton, Hennessy and Hine cognac, and one-quarter of all French champagne sales, with brands like Moet Chandon, Pommery, Veuve Clicquot and Dom Perignon.

LVMH acquired control of Guerlain and Kenzo during the past 12 months, but Arnault insisted that the group is not negotiating to buy any other business at present. He specifically denied reports that LVMH was about to buy Van Cleef & Arpels, the venerable Paris jeweler that has been on the market for two years.

"One of the nice things with our group is that the prospectus of every company that's on sale ends up on our desk. But you can't buy everything, and we aren't holding talks with anyone right now," he insisted. "Our priority at present is internal growth."

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