LVMH Moët Hennessy Louis Vuitton said Monday that revenues for the first quarter rose 5.5 percent, a steep slowdown from the previous year and perhaps an indication that the slowdown in luxury in China as well as continued economic volatility in Europe are beginning to hit the world’s leading brands.
The French luxury company reported sales totaling 6.95 billion euros, or $9.17 billion, during the quarter versus 6.58 billion euros, or $8.62 billion, in the year-ago period. In the first quarter of 2012, sales leaped 25 percent, momentum that was maintained through the second quarter of last year. But in the second half, sales growth began to slow, falling to 10 percent or less in each of the final two quarters of the year.
Dollar figures are converted from euros at average exchange rates for the periods to which they refer.
In organic terms, revenue growth in the first quarter amounted to 7 percent, compared with the same period a year ago, indicating the impact of currencies. LVMH chairman and chief executive officer Bernard Arnault had earlier warned the strong euro might begin to dent growth.
Sales of fashion and leather goods rose 0.4 percent to 2.38 billion euros, or $3.15 billion, helped by Louis Vuitton, Fendi and Céline. Perfume and cosmetics got a boost from Dior’s J’adore, Miss Dior and Dior Homme lines, pushing sales up 3.7 percent to 932 million euros, or $1.23 billion.
The conglomerate’s watches and jewelry business suffered a slight 1 percent dip, as sales totaled 624 million, or $823.7 million.
The owner of brands including Bulgari, Givenchy, Dom Perignon and Guerlain said its performance in the watches and jewelry category was linked to “prudent buying” by multibrand retailers. It also could stem from the impact of the Chinese government’s crackdown on luxury and gift-giving.
The tepid results in watches and jewelry were offset by 16.4 percent growth in the selective retailing segment, which includes business from Sephora. Revenue for this segment amounted to 2.12 billion euros, or $2.80 billion.
According to LVMH, Sephora “gained market share in all its regions and continued to expand on its global store network,” helped specifically by the opening of its Shanghai store, which is one of its largest doors in China.
The company also pointed to a continued uptick in demand from Asian tourists, despite a decline in spending from Japanese tourists, who were impacted by the weaker yen.
“In an economic environment, which remains uncertain in Europe, LVMH will continue to focus its efforts on developing its brands, will maintain a strict control over costs and will target its investments on the quality, the excellence and the innovation of its products and their distribution,” said Arnault. “The group will rely on the talent and the motivation of its teams, the diversification of its businesses and the good geographical balance of its revenues to increase, once again in 2013, its leadership of the global, high-quality goods market.”
LVMH released the sales results after stock markets closed in Europe. It is due to have a conference call today to discuss the results.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye