LVMH – Mo�t Hennessy Louis Vuitton, the world's leading luxury product group, today announced that consolidated sales in the first half of 2001 reached 5,643 million Euros, an increase of 12% compared to the first half of 2000.
In the second quarter, sales also grew by 12%, despite a less favourable economic climate than that of the second quarter of 2000, where sales rose by 40%. The Fashion and Leather and Perfume and Cosmetic business groups performed excellently.
In millions of Euros First half 2001 1st half 2000 Change
Wines & Spirits 852 870 -2%
Fashion & Leather Goods 1,746 1,473 +18%
Fragrances & Cosmetics 1,038 901 +15%
Watch & Jewelry 263 270 -3%
Selective Retailing 1,680 1,464 +15%
Other activities 64 54 N/A
Total 5,643 5,032 +12%
Sales in Wines and Spirits improved in the second quarter 2001 to reach 852 million Euros. Heavy stocking at the distributor level continued to weigh on sales of Champagne, especially in the US. However, there are signs that these stock levels are falling. Cognac registered sales of 403 million Euros (+8%) thanks to continued strong demand in the US and Asian countries, outside Japan. All of our cognac ranges (VS, VSOP, XO) registered double digit growth in the North American market.
After an exceptional increase of 40% in the first half 2000, sales in the Fashion & Leather business group rose by 18%. Sales for Louis Vuitton Malletier, which now has 287 stores throughout the world, were up by 10%, despite constraints in production capacity. Sales improved for other brands with particularly strong performances for Loewe and Thomas Pink as well as Fendi and Kenzo which have recently increased control of their distribution. As of 30th June 2001, the Fashion and Leather Goods business group has a network of 665 stores.
Sales in the Perfumes & Cosmetics business group totalled 1,038 million Euros in the first half of 2001, an increase of 15% and significantly ahead of growth in the market. Sales in the four French fragrance houses alone increased by 14%. The perfumes, “J'Adore” by Christian Dior and “Flower by Kenzo”, met with exceptional success. There was also a good reception for Dior's new skin care lines ” No Age ” and ” IOD “. Sales growth in the US has exceeded 25% thanks in particular to the excellent performance of the division's start-ups, especially Bliss and BeneFit.
Sales in the Watches & Jewelry business group are stable, following the decision to terminate some manufacturing licences for non-Group watch companies and as a result of slower growth in the US economy. The reorganisation of this branch is well underway, and advertising campaigns are producing excellent results, particularly for Zenith watches. Chaumet and Benedom, with the new “Chris 47” Dior watch, also recorded strong sales growth.
Sales in the Selective Retailing business group were up by 15%. Sephora sales in the first half rose by 37% . In Europe the new management team is focusing on improving the profitability of the 393 existing stores and there are plans to open 8 additional stores by end of the 2001. In the US, growth of comparable Sephora stores was in excess of 10%, demonstrating that the concept is gaining recognition and market share, even in a difficult business climate. The evolution of the yen and the continued uncertainty of the economic climate have affected the travel patterns and consumer sentiment of Asian clientele, with a direct impact on results at DFS locations.
LVMH maintains its double digit growth targets for sales and operating profit for the full year.
As explained at the AGM on 14th May, this is a target and not a forecast, and is subject to economic and currency fluctuations in the coming six months. As also stated at the AGM, operating results in the first half are likely to be significantly weaker than for the full year.
First half results will be published on 13th September.