GIVENCHY’S RETIREMENT CONFIRMED
PARIS — Luxury czar Bernard Arnault confirmed Thursday that Hubert de Givenchy will indeed this summer leave the fashion house he founded, ending rumors here that the couturier was reconsidering his decision to retire.
In his first comment on the future of Givenchy, Arnault said in a presentation to analysts and the media here that no successor has yet been found for Givenchy.
“Unfortunately, Mr. de Givenchy has definitely decided to retire. We are currently still trying to find a successor to the founder of this house, who is a man of exceptional talent, a person of great renown,” said Arnault, president of LVMH Moet Hennessy Louis Vuitton, the giant luxury goods conglomerate that owns Givenchy’s fashion and fragrance business.
At the meeting, it was announced that LVMH — excluding extraordinary gains — posted a 24 percent gain in consolidated net profit in 1994 to $738 million (3.67 billion francs) at current exchange, essentially as expected. Including extraordinary gains, primarily involving the stakes of Guinness PLC and LVMH’s holdings in Guinness, final profit in 1994 climbed to $1.29 billion (6.42 billion francs), up 80 percent against a year ago.
Group operating profit grew 21 percent to $1.37 billion (6.8 billion francs).
As reported, LVMH scored a 17.4 percent gain on sales to $5.63 billion (27.97 billion francs) last year.
LVMH also owns the fashion and beauty businesses of Christian Lacroix and Kenzo, Parfums Christian Dior, Guerlain, Louis Vuitton, Hennessy cognac and six leading champagne brands that account for more than a quarter of the world market.
Breaking down results into its five main sectors, the group said that operating profit in luggage and leather goods grew 33 percent to $621.9 million (3.09 billion francs); perfumes rose 30 percent to $224 million (1.11 billion francs); champagne and wine increased 8 percent to $168.4 million (837 million francs), and cognac gained 3 percent to $396.3 million (1.97 billion francs). Losses in other areas, which include fashion and horticultural interests, narrowed to $41.3 million (205 million francs).
Sales by sector in 1994 were also reported earlier and included a 25 percent gain in perfumes to $1.55 billion (7.7 billion francs) and an 18.5 percent gain in luggage and leather goods to $1.35 billion (6.7 billion francs).
“The world market for prestige products continues to grow, and we remain the world leader in this sector,” boasted Arnault, who noted that annual sales of champagne had grown from 50 million bottles in 1960 to 240 million last year. LVMH itself ended last year with stocks of 190 million bottles of champagne in its own cellars.
He added that LVMH had hired nearly 1,000 people in France last year, most of them to operate a new Louis Vuitton plant.
In the fashion business, Arnault said that Christian Lacroix showed “a small loss” in 1994, though he did not provide an exact figure. Lacroix, which has been bankrolled by Arnault since it opened in 1986, “will again show a loss in 1995, but by 1996 it should be making money,” he added. He stressed that Lacroix’s Bazar diffusion line posted very strong sales last year.
“It’s been one of the most successful diffusion lines in its area of the market,” he said. LVMH did not provide a breakdown of turnover in its fashion companies, but it did break down LVMH’s beauty business: Parfums Christian Dior racked up a 12 percent growth in sales last year to $963.6 million (4.79 billion francs); Parfums Givenchy a 10 percent rise in sales to $275.7 million (1.37 billion francs), and Parfums Kenzo a 32 percent advance in sales to $78.7 million (391 million francs).
“The world beauty market is growing between 3 to 4 percent annually. Our brands grew at an average of 10 percent,” said Maurice Roger, chief executive officer of Parfums Christian Dior.
LVMH did not release profit figures for the different perfume businesses, but revealed that Guerlain, which LVMH acquired in 1994, suffered a 20 percent fall in net profit last year to $26.2 million (130 million francs), on a 2 percent rise in consolidated sales to $410.5 million (2.04 billion francs).
Nonetheless, Arnault said that Guerlain’s results “were what we had expected.” He said, “We remain very optimistic about the future of Guerlain.” Arnault stressed that LVMH’s strategy for Guerlain was to develop its international business, above all in the U.S., Southeast Asia and in duty-free shops, though he cautioned that the U.S. market was “structurally one of lower profit margins.”
Though LVMH is a relatively diversified group, some 45 percent of operating profits came from Vuitton, the jewel in the group’s crown and by far the most profitable company in the group. The luggage and leather goods firm has opened 55 stores in the last five years, bringing its total worldwide to 180 (55 of them in North America) as of Dec. 31, 1994.