PARIS — Dior appears to be immune to the headwinds rattling the luxury sector.
This story first appeared in the October 17, 2014 issue of WWD. Subscribe Today.
The French brand on Thursday reported revenues rose 13 percent in its fiscal first quarter, totaling 417 million euros, or $553 million at average exchange, in the period of July 1 to Sept. 30. In the absence of any currency impact, sales at constant exchange were also up 13 percent.
“We saw a good performance on all markets and products,” Dior chief executive officer Sidney Toledano told WWD. “I think it’s the effect of the products,” he said, adding that the quality of service in the brand’s stores also played an important part.
Sales in directly operated stores, which represent the bulk of the brand’s revenues, rose 16 percent at constant exchange compared with the same period in 2013.
Dior last year changed the closing date of its fiscal year to June 30 from April 30 previously.
The company does not provide a breakdown of sales by category. In leather goods, Toledano singled out the successful launch of the Be Dior handbag, with an advertising campaign featuring Jennifer Lawrence, and continued strong sales for the Lady Dior and Diorissimo ranges.
In ready-to-wear, he pointed to the positive reaction to the women’s pre-fall and fall collections designed by Raf Simons.
The executive also reported strong sales of the Archi Dior fine-jewelry collection by Victoire de Castellane, presented at the Biennale des Antiquaires in Paris in September. “A large portion of the collection was sold during the quarter with some very significant sales made to international clients,” he said.
In terms of regions, Toledano — just back from a trip to Los Angeles and New York — said the U.S. posted “very strong growth,” but Asia and Europe were equally resilient. “Europe performed very well and had a very, very good summer,” he said, reporting strong tourist flows in Paris, Milan and London.
Dior is preparing to open a women’s store on Greene Street in New York’s SoHo neighborhood on Nov. 4. It already has a men’s store on the same street.
Among the openings in the fiscal first quarter was a store in Hong Kong International Airport. Toledano said the unit had a good start, despite a sharp reduction in passenger flows from China given the crackdown on luxury spending on the Mainland and, late in the quarter, the pro-democracy demonstrations in the city that have impacted businesses.
“We are satisfied nonetheless. The boutique is very well located, so that has been a plus for us,” he noted. Other stores in the city have been hit by the demonstrations.
“Certain stores close to the zones of the protests have been affected, others far less. We have an important local clientele in Hong Kong that has been less affected. It’s more the tourists that were coming to Hong Kong, the Chinese tourists, but we saw them elsewhere. We saw them in the United States, elsewhere in Asia and in Europe,” Toledano said.
The Dior results were published late Thursday as part of the results of Christian Dior SA, the parent company of the Dior fashion house and LVMH Moët Hennessy Louis Vuitton.
As reported, LVMH posted a 5.7 percent rise in third-quarter sales to 7.39 billion euros, or $9.8 billion, as faster growth in Europe and the U.S. offset a slowdown in Asia. Revenues were hit by a sharp drop in liquor sales, with Chinese consumers buying less cognac as a result of a government anticorruption drive.
The luxury segment overall faces an increasingly uncertain environment, with challenges ranging from a slowdown in consumption to near constant political flare-ups worldwide. Earlier this week, Burberry warned of a “more difficult external environment” ahead while Mulberry issued yet another profit warning.
Bain & Co. and Fondazione Altagamma, the Italian luxury goods association, expect the luxury goods sector to log a 2 percent gain to 223 billion euros, or $283.2 billion at current exchange, in 2014 compared with the previous year.