Dior, Fendi frenzy helps luxury group LVMH extend its reach
By Silvia Aloisi and Mimosa Spencer
PARIS (Reuters) - Rising sales of clothing lines and handbags from Dior, Fendi and Louis Vuitton fueled LVMH's revenue in the second quarter as coronavirus restrictions eased globally and the luxury goods company ousted some competitors to increase its market share.
The luxury goods industry is recovering from the health crisis that has shut down global travel and stores temporarily. The end of COVID-19 lockdowns across much of Europe is stimulating demand in the region for a strong recovery in China.
LVMH, the world's largest luxury goods company, has benefited more than most, using its weight on marketing and social media campaigns, while some of its smaller competitors are still struggling to get back on their feet.
The group announced on Monday that its biggest sales driver, Vuitton, as well as the fashion brands Dior, Fendi, Loewe and Celine achieved record sales and profitability in the first half of 2021 and increased their market share.
Dior, for example, has increased the number of temporary pop-up shops at resorts that travelers are returning to, the company said.
Total sales at LVMH, which also owns champagne and cosmetics labels, rose 84% year over year in the second quarter on a like-for-like basis excluding currency fluctuations, and amounted to 14.7 billion euros (17.36 US dollars). Billion).
That beat a consensus forecast cited by UBS of 69% for growth, which is in line with HSBC's estimates. It was also 14% above pre-2019 levels.
Operating profit more than quadrupled in the first six months of this year compared to the previous year and exceeded the expectations of the analysts surveyed by Refinitiv.
LVMH's shares are up more than 70% since June last year, making the group the largest European company by market value and allowing boss Bernard Arnault to briefly overtake Amazon founder Jeff Bezos as the richest man in the world.
After the $ 15.8 billion takeover of US jeweler Tiffany, which was completed in January, LVMH also made the most of its crisis comeback to invest in labels.
Last week, LVMH announced it would buy a 60% stake in Off-White, a streetwear label founded by Vuitton menswear designer Virgil Abloh, while expanding Abloh's role within the group to launch new brands.
LVMH also took a minority stake in a new clothing and accessories label founded by former Celine star designer Phoebe Philo and increased its stake in Italian shoe manufacturer Tod's to 10%.
Revenues had declined 16% in the past year as the pandemic triggered global lockdowns and stalled international travel.
LVMH's retail division, which includes beauty chain Sephora and duty-free group DFS, has suffered more than its other businesses, despite gaining some ground in the second quarter.
($ 1 = 0.8468 euros)
(Reporting by Silvia Aloisi and Mimosa Spencer, Additional reporting and writing by Sarah White. Editing by Jane Merriman)
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