LVMH Sales Rose 15% In The First Half Of The Year, And Leather Goods Revenue Broke 10 Billion

No matter what industry, competition is a catalyst for growth. With the increasing competition of luxury head competition, the LVMH (thematic reading), which has long been entrenched in the championship, is running faster again after the step by step of the Gucci parent company, such as Kai Yun group and Hermes.

According to the fashion business bulletin, in the first half of June 30th, the world's largest luxury group LVMH sales rose 15% to 25 billion 100 million euros, gross profit margin 66%, operating profit increased 14% to 5 billion 295 million euros, net profit increased 9% to 3 billion 268 million euros.

Among them, LVMH's sales in the second quarter also rose 15% to 12 billion 544 million euros, exceeding analysts' expectations of 12 billion 250 million euros, an increase of 11% over the same period last year. During the period, LVMH recorded double-digit growth of 18%, 11% and 13% in Asia, Japan and Europe, excluding Japan. The performance in the French home market was also not affected by the "yellow vest" activity, while sales in the United States registered an increase of 8%.

As of the end of the reporting period, the group had 4699 stores worldwide, of which 1341 were in Asia except Japan.

It is noteworthy that, with the strong growth of the core brands Louis Vuitton and Dior, the sales volume of the LVMH fashion leather Department increased by 21% to 10 billion 425 million euros in the first half of the year, which has recorded double-digit growth for the 11 consecutive quarter. The revenue of the LVMH for the first time in the first half of the year exceeded 10 billion euros, a record high.

Although LVMH has never released the detailed performance of its brand, it has revealed in the earnings report that all Louis Vuitton businesses have grown significantly in all regions, and men's clothing and handbags have been continuously pursued by young consumers, especially the new products designed by men's creative director Virgil Abloh.

RBC Capital Markets analyst Rogerio Fujimori said earlier that although men's clothing is only a small part of the performance of Louis Vuitton, it can not be underestimated. It has great stimulation to the sales of brand accessories and the high profit core accessories products such as handbags and shoes.

According to the Gartner L2 report, Louis Vuitton ranks first in the list of China's luxury brands Top 10. The report specifically mentioned that the brand's choice of Wu Yifan as the brand spokesperson is the key factor to enhance its market share and influence in China.

The sales performance of Dior fashion and leather goods has also continued to be positive. The growth rate is over 21%. It is the most significant luxury brand in the Department. The new handbag 30 Montaigne has received high attention, and the related micro-blog topic has been over 100 million under the Angelababy and Wang Ziwen's popularity.

Dior menswear art director Kim Jones has become a hot topic in the industry by designing Korean Korean fashion group BTS. In just 1 years after joining the Dior, he thoroughly refreshed the image of Dior Menswear, from inside to outside branded a distinct personal style, which constantly touched young consumers.

Last week, Dior online boutiques officially entered the Chinese market, offering products including handbags, garments, high-end jewelry and beauty products. The Tanabata AMOUR limited series is also on sale. Dior has opened online boutiques in European countries and the United States, according to fashion business express. Asia now includes only mainland China, Japan and South Korea.

After the death of Karl Lagerfeld, the original creative director of Italy luxury brand Fendi in February, the creative power of the brand was taken over by the founder's granddaughter Silvia Venturini Fendi. In order to speed up the process of youth, Fendi has been working with celebrities such as Xu Weizhou and Wang Jiaer in recent years. In May, the first fashion show for men and women was held in Shanghai. It was opened by actor and singer Xu Weizhou, who had 11 million 360 thousand fans in micro-blog, for two consecutive days.

Fendi then joined Tencent to launch the first WeChat game in the fashion industry. With Xu Weizhou as the protagonist, the brand's historical culture and WeChat's understanding of scientific and technological knowledge are integrated. Through game mode, the core concept of "Fun fun" brand of "Fun Fur" contained in the FENDI logo is transmitted to users, and the spirit and value of the brand are understood in the game interaction.

At the same time, the performance of Loro Piana, which is famous for cashmere, continues to rise steadily, especially shoe and clothing business. Its excellent flash store opened in New York has also received positive response from consumers. Hedi Slimane, Celine, has also officially entered the field of men's wear, and has opened independent stores in major cities such as Paris and Tokyo.

Spain's luxury brand Loewe new product is also very popular. The German luxury luggage brand Rimowa also welcomed a good start. Last month, the Chinese 90's singer, nearly 75 million fans in micro-blog, was appointed spokesman for China.

Bloomberg analysts believe that the performance of the LVMH fashion leather sector is actually a microcosm of the luxury industry, which means that the traditional luxury brands are moving closer to the young people through the introduction of street wave elements and star effect, and gaining new growth momentum.

During the reporting period, the number of LVMH except alcohol departments recorded double-digit growth, of which the watch and jewelry sector revenue increased by 8% to 2 billion 135 million euros, mainly due to Bvlgari, Chaumet and tigheya brand performance contribution.

Its revenue from perfume and cosmetics brands including Fenty Beauty, Dior cosmetics and Guerlain rose by 12% to 3 billion 236 million euros, including Sephora's selective retail sector growth of 12% to 7 billion 98 million euros, while the wine and spirits sector's revenue grew 9% to 2 billion 486 million euros.

Bernard Arnault, chairman and chief executive of LVMH, said that a good start has proved the effectiveness of the group's current strategy. The group's high demand for product quality and continuous creativity are the key to success. In the future, it will continue to invest in its brand and aim at long-term development so as to achieve stable and sustainable growth.

Jean-Jacques Guiony, chief financial officer of LVMH, emphasized that the more competitive the market is, the more investment the group will have to invest in its brand so as to make it more flexible in the cruel global environment. According to his disclosure, LVMH's expenditure on brand marketing and stores increased by 15% in the first half of this year.

There is no doubt that LVMH has proved his strength again, but the giant is not satisfied with its immediate achievements. It is reported that LVMH's $2 billion 600 million acquisition of Belmond Hotel Group's transaction will be completed in the third quarter. Last week, it bought some of the shares of Stella McCartney, which was divestiture by the open cloud group.

In addition, Fenty, a luxury brand co founded by LVMH and hip-hop singer Rihanna, is officially released. The brand is the second luxury brand to be launched from the beginning of the group since its establishment of Christian Lacroix in 1987. It is also the first luxury brand to be launched with female stars. Rihanna is personally the CEO and creative director. Jean-Jacques Guiony said that the significance of launching Fenty brand to LVMH is more exploration in the new field. It is too early to talk about the performance of the brand.

In order to better approach the millennial generation, Virgil Abloh launched a web game called "Endless Runner" on the Louis Vuitton official website last week, echoing the inspiration of the urban street scene full of retro feeling from the Louis Vuitton 2019 autumn and winter series of 80s culture. Users can collect Louis Vuitton in addition to skipping all kinds of obstacles on the endless runway. Token. It is reported that Louis Vuitton will open about 100 flash stores around the world this year, 20 more than last year's 80.

For the e-commerce platform renamed "24S" in the current quarter, Bernard Arnault said the group is still in the "learning stage" in digital business. He emphasized earlier that luxury goods will not only be related to products, but also lifestyle and experience, implying the future layout and trend of LVMH.

At the end of the reporting period, LVMH's free cash flow was about 1 billion 700 million euros, and net debt to equity ratio ("leverage ratio") was 24.5%. In view of the continuing turbulence in the global retail environment, LVMH will remain vigilant in the second half of the fiscal year and continue to strictly control costs.

Reuters analysts believe that, like many other competitors, the growth in LVMH performance has benefited from the strong demand in Asian markets, including China. Although the global geopolitical instability will affect consumer confidence to a certain extent, Chinese consumers are still buying luxury goods. Bloomberg analysts said that the consumption of luxury goods in Chinese consumers is being reflued under the stimulation of VAT and tariff adjustment measures, which is not a bad thing.

As Bernard Arnault's personal wealth has risen along with the performance, according to the fashion business express, since 2017, the Dior has been in the bag, Bernard The wealth of Arnault has doubled. This year's wealth has increased by 39 billion US dollars to exceed US $100 billion. It recorded US $108 billion, which once surpassed Microsoft founder Bill Gate and ranked second in the Bloomberg billionaire index. It is by far the largest increase in the list of rich men's wealth, and the only one who ranks among the top 10 luxury industry bosses.

What is most significant is that Hermes, which has been more than LVMH and Kai Yun group's late earnings, first released on Tuesday. In the continuing pursuit of Chinese consumers, its first half sales surged 15.1% to 3 billion 284 million euros, exceeding analysts' expectations.

As of Wednesday's closing, LVMH's stock price was 380.3 euros, and its market value was close to 200 billion euros, which was about 197 billion euros. Hermes's market capitalization surpassed the 65 billion 500 million euros of Kai Yun group and recorded 67 billion 800 million euros.