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."Underlining the synergies the group hopes to achieve with its latest acquisitions, Arnault explained that Kenzo fragrances will be distributed in the U.S. by Givenchy.
Asked about the acquisition of Guerlain, Arnault replied: "It's one of the best-known brands in the world. It fits in perfectly with the long-term strategy of LVMH."
LVMH's star performer in 1993 was clearly Louis Vuitton, which Arnault praised for its "coherent strategy" and "original but also elitist products."
In 1993, sales of Vuitton, which boasts 171 fully owned stores worldwide, jumped 21 percent, to $968.6 million (5.39 billion francs). Vuitton's Cuir Epi line, which was launched in the late Eighties, scored sales of $305.6 million (1.7 billion francs) last year, up 52 percent over the previous year.
Arnault also said that Taiga -- Vuitton's latest line, and only the third in its history -- achieved sales of $10.2 million (57 million francs) in its first three months.
Group perfume sales grew 13 percent in 1993, and the firm used slides to show how this gain outperformed French rivals such as L'OrÄal (up 6.9 percent) and Clarins (up 5.5 percent). LVMH's perfume-cosmetics sector in 1993 reached sales of $1.1 billion (6.12 billion francs).
The house devotes 6 percent of perfume sales annually to advertising, Arnault noted.
Sales of Kenzo perfumes, which were not consolidated into LVMH's 1993 accounts, jumped 42 percent, to $53.4 million (297 million francs).
Arnault, who at previous shareholders' meetings had faced tough questioning from the floor, was warmly received by Friday's audience. And when he told shareholders that LVMH would issue one free share for every 10 LVMH shares, he got sustained applause from the floor.
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