Shareholders in LVMH Moet Hennessy Louis Vuitton SA did their best at Monday’s annual meeting to live up to the luxury group’s “creative passion” slogan.
After Chief Executive Officer Bernard Arnault wheeled out a polished if familiar line on LVMH’s long-running feud with Pinault Printemps Redoute over design house Gucci NV, investors hot-footed it to microphones to ask myriad variations of the question dearest to their hearts: What about the dividend?
“Why is the dividend per share only 11% higher when operating profit for 2000 was up 26%?” asked one of the thousands attending.
“Why are you investing in all these minor acquisitions when you could be pay-ing out more in dividends?” asked another.
LVMH paid a dividend of euro 1.13 per share for 2000 compared with euro 1.02 a year earlier.
Mr. Arnault stressed that the group sees this year’s priority as organic growth after an acquisitions spree last year that took in operations from New York designer Donna Karan’s fashion business to once-grand Paris department stare La Samaritaine.
However, his suggestion that the picture would brighten in the second hall of the year failed to lift the mood in the mar-ket. In Monday trading an the Paris stock exchange, LVMH shares fell 6.6% to euro 64.90.
Mr. Arnault painted a picture of the luxury-goods industry as a long-term game.
“To be the world leader in luxury goods you need star brands. Unlike some compa-nies in the sector,” Mr.Arnault said. “We have star brands in all areas — Dior, Dom Perignon and so on — but you must be pre-pared to invest in potential star brands of the future.
“It takes 20 years to build a star brand, and if you don’t want to pay a high price to buy the stars you have to get in early,» he said.
