LVMH SAYS BEAUTY SEGMENT BOOSTS ’95 SALES
PARIS — LVMH Moet Hennessy Louis Vuitton said Monday its estimated net profit in 1995 will be up about 10 percent, and preliminary figures indicate sales last year rose 6.4 percent to $5.79 billion (29.76 billion francs) at current exchange rates.
The firm will disclose actual net profits on March 21. In 1994, the luxury goods conglomerate posted net income of 3.67 billion francs, before extraordinary gains. The expected gain in net income comes despite a lower-profit forecast announced by UK beverages group Guinness, in which LVMH holds a 20 percent stake, and an announced tax hike for French corporations.
At constant exchange rates, sales increased 11.7 percent, the company said. It also noted that by geographic areas, sharp sales increases were realized in several markets, including the United States, China and the UK.
By product sector, the year’s sales gains were paced by the firm’s beauty segment, whose sales rose nearly 21 percent to $1.8 billion (9.27 billion francs), stemming in part from the successful European and Mideastern fall launch of Christian Dior’s Dolce Vita fragrance.
The luggage and leather goods operations, fueled mainly by Louis Vuitton, posted a sales gain of 10.2 percent to reach almost $1.44 billion (7.4 billion francs).
In contrast, cognac and spirits suffered from a 12 percent drop in revenues, falling to $1.03 billion (5.27 billion francs). Sales for champagne and wines grew only 2 percent last year to $1.14 billion (5.83 billion francs).
Sales in other activities, which include the fashion businesses of Kenzo, Givenchy and Christian Lacroix, rose 6.3 percent to nearly $389 million (2 billion francs). This figure, not broken down by firms, also includes revenues from the Delbard horticulture firm and publishing.
Looking forward, LVMH said it would continue to build its businesses in an “uncertain economic and monetary environment.” Product launches for both fragrances and cosmetics are due this year from Guerlain, Givenchy and Kenzo and will help spur growth. The group said that brand awareness and popularity would be nurtured through investments in advertising and store openings.
The group is also looking to develop new markets such as Vietnam in Southeast Asia as well as in South American countries such as Brazil. Moreover, the new operating structure of the wines and spirits business is expected to enhance distribution synergies. External growth, stemming from the transfer of the Celine ready-to-wear and luxury goods company from Financiere Agache — another holding company, which, like LVMH, is controlled by Bernard Arnault — as well as the planned acquisition of the remaining shares in Spanish luxury leather goods firm Loewe will also contribute to 1996 sales.
Last year’s sales included the acquisition of the Fred Jeweler & Watchmaker business.
Net profits will also grow this year, the company said.