Luxury lovers from China and the US rebound at LVMH By Reuters


© Reuters. FILE PHOTO: Louis Vuitton logo in front of a store in Paris

By Silvia Aloisi and Sarah White PARIS (Reuters) – Sales at French luxury goods group LVMH recovered much faster than expected in early 2021, driven by demand for Louis Vuitton bags and Dior products as shoppers Chinese and Americans made the most of the relaxation. of COVID-19 restrictions. A freeze in international tourism caused by the pandemic added to the pain of store closures for the luxury industry last year, and the crisis had raised concerns that consumers could lose their appetite and purchasing power for high-end products. spectrum. LVMH, the largest company in the industry and owner of more than 70 brands ranging from Moet & Chandon champagne to Guerlain cosmetics, posted first-quarter revenue on Tuesday that even exceeded 2019 levels, before the pandemic. Its comparable sales, which eliminate the effect of currency changes and its acquisition of American jeweler Tiffany, rose 30% year-on-year in the three months through March to 14 billion euros ($ 16.70 billion). That was nearly double an analyst consensus forecast for 17% growth cited by UBS. Compared to pre-pandemic levels and the first quarter of 2019, comparable sales increased 8%. Sales in Asia excluding Japan were up 86% from a year earlier, and in the United States, which is implementing a massive stimulus program, revenue was up 23%. That contrasts with a 9% drop in Europe in the period, where economies are also expected to rebound this year, but some countries, including France and Italy, have implemented new lockdowns to control rising infection rates. In much of Asia, stores have been open since last spring. Luxury customers have also started buying more expensive products online, helping Vuitton, for example, although LVMH said this is still a minor factor overall. “Nothing replaces store visits, it can just be improved with an earlier visit online,” CFO Jean-Jacques Guiony said in a conference call with analysts. NO MORE ACQUISITIONS? LVMH’s revenue had fallen 16% last year and its tax-free airport business is still in trouble. But its fashion and leather goods division, which is home to Vuitton, Dior and brands like Fendi and which accounts for almost half of LVMH’s revenue, posted a 52% increase in like-for-like sales, again well above expectations. of analysts 27%. increase. Sales of the watches and jewelry division increased 138% when including acquisitions and foreign exchange effects, benefiting from the consolidation of Tiffany. LVMH completed the $ 15.8 billion acquisition in early January after a legal battle. When asked about more potential purchases in the luxury goods sector, including brands like Armani, Guiony played down suggestions that LVMH was ready to strike again, saying the group was focused on integrating Tiffany. ($ 1 = 0.8382 euros)