PARIS — Fifty years from now, will people still be using iPhones? Who knows, but luxury titan Bernard Arnault is certain they’ll still be sipping Dom Perignon.
Addressing back-to-back shareholders’ meetings for LVMH Moët Hennessy Louis Vuitton and Christian Dior SA, Arnault lobbed that analogy as he discussed the importance of taking a long-term perspective in business — and innovating constantly — especially amidst foggy economic circumstances.
“It is we who create the future of our business,” Arnault said in an upbeat, at times professorial address that held an audience numbering more than 1,000 rapt in a vast hall at the Carrousel du Louvre here. “It’s not what we will do today, but what we will do in 10 to 15 years.”
Arnault trumpeted that 2011 was another “vintage” year for LVMH, with profits from continuing operations advancing 22 percent to 5.26 billion euros, or $7.1 billion, outpacing the growth in sales, up 16 percent to 23.66 billion euros, or $32.94 billion, as reported.
LVMH’s chairman and chief executive officer said he expects the good times to continue rolling, noting that business in the first quarter was better than the fourth quarter of 2011, when sales advanced 20.4 percent to 7.35 billion euros, or $9.92 billion.
“We are relatively confident for the development of our business in 2012,” he said, flashing a graph showing LVMH’s stock rising 165 percent since Jan. 1, 2009, versus only 5 percent for the CAC 40.
Again turning to the burgeoning Internet industry to illustrate dramatic reversals of fortune, he noted that Apple Inc., a company once on the verge of bankruptcy, has roared back to become one of the most highly valued companies on the planet. By comparison, Yahoo Inc. finds its once rosy business withering, while search-engine rival Google Inc. roars ahead.
Arnault reminded shareholders that LVMH, the world’s largest luxury conglomerate, grew out of a troubled textile group called Boussac that he acquired back in the late Eighties.
France’s richest man acknowledged the debt woes and austerity measures that continue to hobble Europe’s outlook, but stressed that LVMH, which exports roughly 80 percent of its production, is well-positioned to take advantage of global growth, projected to tally 4 percent this year.
Just back from a trip to Vietnam, he marveled at the capitalist nature of the communist nation. “French products are particularly appreciated there,” he related, smiling broadly. “There is a dynamism in this country I can foresee for the next 10 years. It has a very interesting growth potential.”
Indeed, he noted Dior would be the next of his brands — which range from Givenchy and Fendi to Zenith and Bulgari — to plant stores in the country, which has a population of about 90 million people, and a pair of Louis Vuitton boutiques: one in Ho Chi Minh City and one in Hanoi.
Arnault said LVMH took market share “everywhere” in 2011, buoyed by sustained demand for luxury, particularly in emerging markets.
Yet he also highlighted victories in mature markets, boasting that Dior’s J’adore remains the best-selling perfume in France for the second year running. He also touted a vigorous rebound in disaster-stricken Japan and noted that it remains a “very important market for us,” albeit “less dynamic than China.”
He cited “remarkable growth” at DFS in Asia, marveling at not only the number of shoppers at its locations, but their increasingly sophisticated selections. While such duty free outlets have a reputation for selling mainly liquor and cigarettes, he said Chinese clients in Macau, for example, come in search of perfumes, jewelry and leather goods.
Arnault recalled that a decade ago, financial analysts were urging LVMH to off-load its “selective distribution” division, particularly DFS and Sephora, now both thriving and profitable businesses. (Last year, the business group saw sales increase 20 percent.)
“In this business, you have to be patient,” he stressed, also noting that some of the group’s medium-sized fashion brands, including Loewe, are now showing strong growth potential.
The Dior meeting was a brisk affair, given the Dior fashion house’s equally strong performance last year: Profits more than doubled to 85 million euros, or $118.4 million, as sales in its own stores advanced 28 percent.
Dior noted that it keeps trimming back its wholesale business: It represented only 12 percent of revenues last year, down from 15 percent in 2010. Last year, 84 percent of Dior sales were generated in its own boutiques.
The weight of fast-growing Asia also continues to grow, accounting for 45 percent of Dior’s sales last year. Europe and the Middle East represented 46 percent, while the Americas only 9 percent, down 1 percentage point from 2010.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)