PARIS — The economy hasn’t dulled the luster of LVMH Moët Hennessy Louis Vuitton.
The French luxury conglomerate on Tuesday reported better-than-expected first-half profit growth of 7 percent as its star Louis Vuitton brand delivered strong double-digit increases in most geographic zones, excluding Japan.
Group share of net profit in the six months reached 891 million euros, or $1.36 billion, from 834 million euros, or $1.11 billion, last year on revenue growth of 5 percent to 7.79 billion euros, or $11.92 billion, from 7.41 billion euros, or $9.85 billion, in the comparable period.
Adverse currency conditions, which LVMH said reached “record” proportions, weighed heavily on the numbers, shaving 7 percent off of revenues and eating 12 percent into profit.
LVMH chief Bernard Arnault told a meeting of analysts and press that he remained confident for the rest of the year and that sales in July proceeded at the same pace as in the first half. He said Vuitton continued to deliver double-digit sales growth.
“I’m pretty confident for an excellent second half,” he said, confirming LVMH’s objective for a “tangible increase in results for 2008.”
“The economy and monetary situation are uncertain, but it was already tough in the first six months,” said Arnault.
LVMH’s numbers underscored health among Europe’s key players in a tempestuous economy beset by inflation and eroding consumer sentiment.
Burberry, Hermès and Compagnie Financière Richemont all reported strong numbers this month, driven by demand from emerging markets where newly rich clients continue to spend.
LVMH’s sales in Asia jumped 25 percent in local currencies and 13 percent in euros, led by China. “The region is in great shape,” said Jean-Jacques Guinony, LVMH’s chief financial officer.
Overall LVMH sales in the U.S. grew 9 percent in dollar terms, while Europe advanced 10 percent in local currencies. Sales in Japan retreated 6 percent as business on the island nation continued tough.
LVMH said profits in fashion and leather goods gained 5 percent to 858 million euros, or $1.31 billion, on sales of 2.76 billion euros, or $4.22 billion, up 6 percent, driven by demand for Vuitton bags like the Mahina and Galliera models. This compares with profits of 814 million euros, or $1.08 billion, on sales of 2.6 billion euros, or $3.46 billion, in the previous year. Allcurrency exchanges were made at average rates for the respective periods.
Sales in the division, LVMH’s biggest, would have grown 14 percent without the impact of currency exchange rates.
Yves Carcelle, who heads the division, said demand for Vuitton hasn’t been hurt by the economy.
“We have seen no slowdown in the U.S. or Europe or China,” he said. “Every year we find a new pocket of riches around the world,” he added, explaining that new Vuitton stores in Qatar, Finland and Romania have seen significant success.
Carcelle underscored strong performances from Fendi, Marc by Marc Jacobs and the improvement of profitability at Donna Karan.
Perfumes and cosmetic sales rose 8 percent to 1.26 billion euros, or $1.93 billion, thanks to new fragrances including Dior’s Escale a Portofino. Profits rose 22 percent to 132 million euros, or $201.9 million, from 108 million euros, or $143.6 million.
Beauty chain Sephora logged “remarkable growth,” chief operating officer Antonio Belloni said, pushing ahead sales in the selective retailing division 6 percent to 1.99 billion euros, or $3.04 billion, from 1.88 billion euros, or $2.49 billion. Profits rose 5 percent to 151 million euros, or $231 million, from 144 million euros, or $191.4 million.
Watch and jewelry sales grew 7 percent to 417 million euros, or $638 million, thanks to demand for Tag Heuer watches and Chaumet jewelry. The division’s profit gained 30 percent to 74 million euros, or $113.2 million.
Profits in the wines and spirits division rose 4 percent to 409 million euros, or $625.8 million, from 393 million euros, or $522.3 million. Sales retreated 2 percent to 1.31 billion euros, or $2 billion, hurt by stock issues and adverse currency exchange conditions.
The numbers were released after the market closed. LVMH shares fell 0.4 percent to 68.03 euros, or $107.09 at current exchange, in trading on the Paris Bourse.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast