PARIS — Luxury continues to steamroll over morose economic data.
Signaling the sector’s robust health, LVMH Moët Hennessy Louis Vuitton said sales in the third quarter advanced 17.6 percent to 6.01 billion euros, or $8.51 billion, confirming its “confidence for the remainder of 2011.”
LVMH’s gains follow strong third-quarter figures for Burberry, and research by Bain & Co. and Fondazione Altagamma released Monday that estimates global luxury goods sales are likely to advance 13 percent this year to 700 billion euros, or $971.2 billion at current exchange.
The French conglomerate headed by business titan Bernard Arnault cited momentum in Asia, Europe and the U.S., suggesting volatile stock markets and the Continent’s debt woes have yet to dampen consumer appetite for expensive fashions, accessories and liquors.
Parent of brands including Givenchy, Dom Perignon and Guerlain, LVMH also highlighted a return to growth in Japan — the latest indicator that the impact of the earthquake and tsunami last March has been short-lived and relatively muted.
Stripping out the impact of currency and acquisitions, sales at all business divisions posted double-digit gains, with cash-cow brand Louis Vuitton demonstrating “exceptional progress” around the world, LVMH said.
The third-quarter figures reflect the acquisition of Roman jeweler Bulgari, whose financials were consolidated as of June 30. Stripping them out and the impact of currency fluctuations, sales rose 15 percent — roughly the same pace LVMH has recorded each quarter so far this year.
“We all know that in the current environment most people are looking for reasons to be worried rather than to be optimistic — and we are very proud to disappoint pessimists,” Jean-Jacques Guiony, LVMH’s chief finance officer, told a conference call on Tuesday. “We see the environment in which we operate not being materially different from the beginning of the year.”
He said sales in LVMH’s own stores in the first weeks of October were “in line with what we have seen so far this year.”
Trading in southern Europe, notably Greece, Spain and Portugal, is weaker than in the north of the Continent, Guiony allowed. However, business in all other regions accelerated since the first half.
Excluding Bulgari, nine-month revenues in local currencies jumped 27 percent in Asia and 18 percent in the U.S. In Europe, revenues climbed 7 percent, one point lower than in the half. LVMH described a “return to normal business” in Japan, where a 3 percent bump in sales in the third quarter narrowed the nine-month decline to 3 percent.
“We’re seeing no signs of slowing down in China,” he added.
Revenues in the three months to Sept. 30 rose 13.9 percent for fashion and leather goods, 19.6 percent for selective retailing, 2.9 percent for wines and spirits, and 160.7 percent for watches and jewelry. Perfumes and cosmetics slipped 1.5 percent, partly due to weak demand in southern Europe and partly due to the disposal of Labrosse et Dupont last year.
Guiony also described demand for skin care in most countries as “pretty soft.”
In the nine months, group revenues totaled 16.3 billion euros, or $22.94 billion. Dollar figures are converted from euros at average exchange rates for the periods in question.
Sales of fashion and leather goods — LVMH’s largest division — gained 13.3 percent in the nine months to 6.19 billion euros, or $8.71 billion, with Vuitton recording double-digit growth and demonstrating strong demand across all product categories and leather lines, including classics. LVMH trumpeted a “remarkable” performance for Celine since the start of the year, and “strong progress” for Fendi and Donna Karan.
Guiony said all brands contributed to an acceleration of leather goods and fashion sales in the U.S., with nine-month sales leaping 26 percent in local currencies.
Expanding tourism in Asia, particularly to Hong Kong and Macau, fed growth in selective retailing, with the division logging 17.9 percent revenue growth to 4.38 billion euros, or $6.16 billion. Comp-store sales at Sephora in the third quarter rose 13 percent in the U.S. and 7 percent in Europe, Guiony noted.
Sustained demand for Champagne underpinned a 7.4 percent increase in revenues for wines and spirits to 2.31 billion euros, or $3.24 billion.
Sales of perfumes and cosmetics rose 3.3 percent to 2.31 billion euros, or $3.25 billion, reflecting “sustained” growth of flagship product lines, particularly Christian Dior’s perennial J’Adore perfume, ranked No. 1 in France.
Reflecting Bulgari’s contributions, revenues in the watches and jewelry division vaulted 76.4 percent to 1.21 billion euros, or $1.71 billion. At comparable structure and at constant exchange rates, the gain stood at 26 percent. “Bulgari is performing well across all product categories,” LVMH noted.
The world’s largest luxury goods maker gave no specific guidance for sales and profits other than to further extend its “global leadership position in luxury products.”
Responding to an analyst’s question, Guiony noted there was no “material difference” in LVMH’s shareholding in Hermès International, which stands at about 21.4 percent.
Shares in LVMH rose 0.4 percent Tuesday on the Paris Bourse to close at 114 euros, or $155 at current exchange rates.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion