PARIS — Worried about the impact of the financial storm on luxury sales, analysts on Friday peppered LVMH Moët Hennessy Louis Vuitton executives with questions about how the bellwether French firm was performing.
In a conference call with investors, LVMH finance director Jean-Jacques Guiony said business is holding so far, even if growth was not as brisk as earlier this year. LVMH reported a 4.5 percent increase in sales for the first nine months of the year to 11.96 billion euros, or $17.94 billion.
He said Louis Vuitton last week logged retail sales growth of 12 percent. His comments helped send LVMH stock surging into positive territory after trading in the red for most of the day. Shares in the French luxury firm closed up 2.2 percent as the overall CAC40 index of top French companies lost close to 10 percent.
Guiony said LVMH sales in September were relatively strong after some weakness in August, particularly in Asia, which LVMH attributed to a disruption in its Chinese business linked to the Olympic Games. He said the U.S. was holding up, as well.
“I didn’t say September was fantastic,” stressed Guiony. “But it was much better than August and more or less in line with July.”
Even if the Vuitton brand remained robust, watches raised alarm from some analysts. Sales of watches declined 2 percent on a like-forlike basis, according to an investment note from HSBC analyst Antoine Belge. LVMH said watches had 4 percent organic growth in the quarter.
“Sales of watches did not slow down, but collapsed,” said Belge in the report.
Guiony said much of the deceleration came from declines in Tag Heuer’s lower-end watches. Sales of watches fell midsingle digits in the U.S. and in Japan during the quarter, Guiony said.
He said sales of watches in Asia grew 20 percent in local currency, and in Europe, grew about 10 percent. Guiony said watch sales were suffering most in the U.S. and that business looked “particularly difficult” going forward.
“We are in a strange situation,” said Guiony, noting that sell-out rates of watches were higher than sell-in rates. He attributed the situation to retailers facing cash difficulties and becoming overly cautious. “It’s more a lack of confidence from retailers,” said Guiony.
Despite obvious uncertainty about the future market, Guiony painted an overall confident picture for the resilience of luxury sales.
He said the workhorse Vuitton brand logged double-digit organic revenue growth through the first nine months of the year, and that the overall fashion and leather goods division, with ranges from Celine to Givenchy, had 9 percent organic growth in the third quarter.
Nonetheless, fashion and leather sales grew less quickly in the third quarter than in the first half, when growth was 14 percent. The division’s sales grew 17 percent in the U.S. in dollar terms, 29 percent in Asia in local currency and 9 percent in Europe. Only in Japan were sales negative. “The quarter was a good ride for Vuitton,” said Guiony.
He said emerging markets had shown no signs of slowing after some decline in Asian markets due to the Olympics. Guiony said Russia was “still doing extremely well — there were no worrying signals in the quarter.” He said China and the Middle East also continued robust. By region, revenues in the first nine months gained 9 percent in the U.S., 22 percent in Asia and 9 percent in Europe. Sales in Japan, due to “ongoing challenges,” fell 7 percent. Sales of perfumes and cosmetics gained 7 percent in the quarter on “good momentum” in the U.S., where they gained 16 percent in dollar terms, and 25 percent growth in Asia. Fashion and leather goods grew 9 percent in the quarter, with dollar sales in the U.S. growing 17 percent. Sales advanced 29 percent in local currency in Asia, and results in Japan were negative.
Selective retailing sales gained 7 percent in the quarter, led by 14 percent growth in the U.S. and 13 percent growth in Europe. Sales in Asia edged ahead 8 percent.
Separately on Friday, Christian Dior Couture said sales in the first nine months totaled 564 million euros, or $858.7 million, an increase of 3.5 percent at constant exchange rates. Christian Dior SA, parent of the Dior fashion house and LVMH Moët Hennessy Louis Vuitton, also confirmed its objective of tangible growth in 2008.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)