What Factors Contributed To Double-Digit Growth In Net Profit In The First Half Of LVMH?

According to the world clothing and shoe net, China's rich have begun to buy LV handbags again, pushing their parent company, the world's largest luxury group.

In the first half of this year, its performance was strong.

According to LVMH's latest earnings report, the group's sales surged 14.6% to 19 billion 714 million euros in the first half of June 30th, while net profit rose 24% to 3 billion 640 million euros.

It is worth noting that the figures for the same period last year were very bad. Sales in the first half of last year were plight due to tourism and Paris attacks and the poor performance of Asia and France.

and

The performance of the category is poor and sales are dismal.

This year, the situation is reversed, and incomes in all regions are growing, especially in Japan and Europe.

By Sector:

LV is the best performing luxury brand in the Department. Thanks to the strong performance of LV and Supreme's series of bestsellers and the performance of C line, Kenzo, Loewe and Fendi, the fashion and leather sector is the best performing category, with sales surging 17.2% to 6 billion 890 million euros. It is worth noting that the first series of Clare Waight Waight, the first female creative director in the history of Givenchy, will be released in October.

The sales of perfume and make-up Department increased by 14% to 2 billion 670 million euros, of which Dior's makeup and perfume products were still the growth engine of the Department, both increased significantly, Fresh's latest black tea series increased in Asia, Givenchy's lipstick and Benefit's eyebrow products were also good, and a series of Fenty Beauty by Rihanna, which was co operated with star Rihanna, was also introduced.

Thanks to Bvlgari's Serpenti and B Zero 1 products and the positive performance of tiger and Hublot's sales in China, watches and jewellery sales also recorded an increase of 14% to 1 billion 840 million euros.

Sales of selected retail sectors, including Sephora and DFS, increased by 14.5% to 6 billion 280 million euros, of which Sephora grew very well in Asia. It was mainly driven by its effective full channel marketing mode and strong sales growth in e-commerce channels. The 24 LE S vres, launched by the group and LE BON MARCH Department store, was formally launched on June 6th and received high attention from the industry.

Sales of liquor sector increased by 11.6% to 2 billion 290 million euros. During the period, the Department also launched a special e-commerce platform Clos 19, of which Hennessy's sales rose 16%, especially in China, where the performance began to recover significantly.

By Region:

Thanks to the strong performance of China's regional performance, the LVMH group's sales growth in Asia Pacific region, except Japan, was the most significant, increasing by 29%.

Sales in the US region were also unaffected by the downturn in the fashion retailing industry, and recorded a strong growth of 25%.

Europe's regional sales increased by 18%.

Sales in the French local market increased by 9% over the same period last year.

Sales in Japan increased by 7%, while sales in other parts of the world recorded an increase of 12%.

As of the end of the reporting period, LVMH group has 4059 stores in the world, including 1086 in Europe, 1022 in Asia, 401 in Japan, 494 in France, 715 in Britain, and 341 in other regions.

After the release of the earnings report, LVMH Group Chairman and chief executive officer Bernard Arnault said that in the first half of this year, the impact of European terrorist attacks and economic crisis on consumers is gradually weakening. China's wealthy consumers are also starting to buy luxury goods. The future group will focus its attention on the field of digital and innovative marketing.

The group also pointed out that the German luxury luggage brand Rimowa, which was acquired in October last year, is also one of the main drivers of revenue growth.

Bernard Arnault also pointed out that the group's core brand LV launched this year's LV x KOONS and LV x Supreme joint series has received a positive market reaction, so that the brand's exposure and influence in social media have greatly improved, and have made a great contribution to the growth of brand performance.

Due to the success of these cooperation series, Bernard Arnault believes that such cooperation strategy is safe.

The industry can predict that LV may have more cooperation with other brands in the future.

In addition, the perfume series launched by LV after 70 years has also become its new growth point. Bernard Arnault is very optimistic about the market opportunities of perfume business.

LV CEO Michael Burke also revealed in the media interview that the brand looked at the current market timing. In the past few years, the high-end perfume line had not yet matched the mature audience. With the perfume market moving from the public to high-end products, consumer awareness gradually improved. Now it is the right time to launch the high-end perfume line.

John Guy, an analyst at MainFirst bank, points out that nowadays luxury brands are so competitive that brands need something else to attract customers to stores.

He predicted that the perfume category could increase LV's annual revenue by more than US $500 million over the next few years.

{page_break}

It is noteworthy that LVMH group has completed the acquisition of Christian Dior fashion department in July 3rd, with a price of 6 billion 500 million euros. After the completion of the acquisition, LVMH will also have Dior's perfume cosmetics and fashion department. The sales volume of the Dior fashion department is expected to expand to 3 billion euros in 2020.

After a series of preparations, the LVMH group began its efforts in the field of electricity business this year. It has launched a liquor business platform Clos 19 and an e-commerce website with more than 150 luxury brands, 24 S vres. Last week, the world's first fashion headline network reported that the group's core luxury brand LV launched an online shopping service in China.

Some analysts pointed out that with the gradual pfer of consumer habits to the online market, luxury brands will pay more attention to and accelerate the layout of the electricity supplier market, but are still more cautious.

LV did not choose Tmall's and Jingdong's electronic business platform, but from the official website to test the market.

According to the latest report of Euromonitor International, the online sales account for 20% of China's total retail sales, most consumers prefer to browse and purchase products through mobile phones.

The report also points out that China will surpass the United States as the world's largest luxury market in the next four years.

Data show that LV parent company LVMH group last year accounted for only 5% of the total net sales of about 2 billion euros, apparently can not meet the ambitions of LVMH boss Bernard Arnault.

It is noteworthy that although the luxury industry has been warming up in the past half year, Bernard Arnault has pointed out in its latest report that the geopolitical economy and politics of the world remain unstable, and the group remains cautious about the performance of the second half of the fiscal year.

At present, its US brand Marc Jacobs has been dragged down by the LVMH group, and is continuing to restructure, including closing the sub line Marc by Marc Jacobs, closing stores and other initiatives.

LVMH said in its earnings report that the brand has "strengthened product design and has continued to restructure".

Thanks to the strong recovery of performance, the LVMH group's stock price has increased by more than 20% since the beginning of this year, and its market value has also broken the record of 110 billion 600 million euros, and it is also the world's highest market value luxury group.

More interesting reports, please pay attention to the world clothing shoes and hats net.