LVMH Encirclement And Suppression Gucci Depends On Street Breeze?

The world's largest luxury group

Today I handed in my first beautiful report card in 2018.

According to the world clothing and shoe net, LVMH (MC.EPA) sales rose 10% to 10 billion 850 million euros in the first quarter of March 31st, an organic growth of 13%, exceeding analysts' expectations of 8.5%, mainly due to its fashion and

The rapid growth of brand business is driving.

During the period, the core of the group

Sales of leather goods sector rose 25% to 4 billion 270 million euros, organic income grew 16%, the growth of 15% in the same period last year, and no increase in the first quarter of 2016. Obviously, the group's Dior fashion department, which was purchased in June last year, has made a great contribution to the growth of sales volume.

The picture shows the main performance data of LVMH in the first quarter.

In addition, LV continued the strong growth trend of last year. The latest fashion show held by the Le Louvre Museum Museum in Paris is highly valued by the industry.

Fendi and Loro Piana's clothing and footwear business continued to grow rapidly.

Hedi Slimane has joined C e line as director of art, creativity and image.

It is reported that C line will launch the first men's wear series, aiming to double or even three times sales in the next five years.

The clock and jewellery department, which was stimulated by Bvlgari's strong sales, increased its organic revenue to 20% euros to 959 million euros. Chaumet's new high-end jewellery series is also popular among consumers.

At the end of the Basel watch and Jewellery Fair, LVMH's watch brand Hublot, TAG Heuer and Zenith launched its innovative products.

At the same time, the income of perfume and cosmetics department increased by 8% to 1 billion 500 million euros, and organic income increased by 17%, mainly due to the continuous growth of Dior, Givenchy perfume business and the sales of cosmetics, cosmetics and skin care products such as Guerlain, Benefit, Fenty Beauty and Fresh.

Sales of selected sectors covering Sephora and DFS duty free businesses fell by 2% to 3 billion 104 million euros at fixed exchange rates, while organic income grew by 9%, mainly due to the termination of last year's Hong Kong International Airport franchise business.

Sephora continues to win more market share worldwide by providing innovative interactive experience for consumers.

The sales volume of wine and spirits business sector, which was affected by the downturn in China and the US market, was 1 billion 195 million last year, while organic income increased by 10%.

The picture shows the main performance data of LVMH last year.

Although LVMH has not yet announced its performance in various regions of the world in the first quarter earnings report, according to the 2017 fiscal year report, Asia has a total revenue of 11 billion 877 million euros, accounting for 28%, and has 1151 stores. The income of the Americas region is 10 billion 691 million euros, accounting for 25%, a total of 754 stores. The income of the French local area is 4 billion 172 million euros, accounting for about 11%, with 508 stores.

As of the end of the reporting period, LVMH's brand has more than 4000 stores worldwide.

Analysts say that with the gradual eastward shift of the regional center of luxury consumption, China and the Japanese market have become the focus of the LVMH development. In addition to the continuous development of e-commerce network in China, the group also promoted the influence of its brand in Japan by running show and inviting Japanese supermodel Kiko Mizuhara as Dior makeup endorsement.

It is reported that the United States, China and Japan have become the target market of Dior in the next few years.

LVMH shares rose yesterday, a record high.

For LVMH's first quarter performance, RBC analyst Rogerio Fujimori said it was a good start and laid a good tone for the entire luxury industry. With the strong ability of LVMH to deal with foreign exchange risk, this year's earnings are expected to further improve, so LVMH will maintain the "win over the market" rating.

Exane BNP Paribas Paris bank analyst Luca Scola pointed out in a report that the first quarter of this year coincided with the peak of China's luxury consumer confidence, which created a positive environment for the luxury industry. Its brands, which are popular with Chinese consumers, are clearly becoming the beneficiaries of this trend.

Another news revealed that Chinese consumers' pursuit of LV handbags and Givenchy make-up products promoted LVMH to become the most valuable French company last year.

According to Bloomberg data, although China's economic growth slowed to 6.5% this year, consumers will maintain high demand for luxury goods.

On the same day of the publication of the earnings report, LVMH officially launched the new La Maison des Startups, a new project to support start-ups. This is the latest strategic cooperation project with Station F, a start-up incubator, aimed at bringing all kinds of high technology into the luxury industry, bringing new solutions to LVMH and other luxury brands.

Speaking at the opening ceremony of the project, LVMH chairman Bernard Arnault said that digitalization has narrowed the distance between brands and consumers, and innovation is the basic value of LVMH.

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At the event, Bernard Arnault personally tested the Memory Mirror launched by Memomi, a digital mirror platform, using artificial intelligence and virtual augmented reality technology to enable consumers to test their products online in real time, including clothing, glasses, shoes, accessories and cosmetics.

The picture shows LVMH boss Bernard Arnault visiting the site of the new project La Maison des Startups.

Station F, located in Paris, was founded in June last year by the French billionaire Xavier Niel. It covers an area of 34 thousand square meters, and can accommodate more than 1000 enterprises in start-ups.

In addition to LVMH, other partners of Station F include L'OREAL group, Korea technology company Naver / Line and Facebook.

Since the beginning of 2017, LVMH's brand has begun to embrace digital actively. First, the group launched an e-commerce platform named 24 Sevres, and then launched its e-commerce service to LV China's official website. At the end of 2017, the group's most conservative luxury brands C e line and Berluti also launched a new official website with e-commerce services.

The group's chief digital officer, Ian Rogers, said in an interview that LVMH's team is quite different from what it was two years ago. It not only attaches much importance to the brand's performance in the social media such as Instagram and China WeChat, but even C line now has a team dedicated to the whole channel and digital business.

When it comes to the purpose of LVMH's launch of La Maison des Startups is to control all innovative technologies for themselves, and avoid moving to competitors, Ian Rogers responds that LVMH will not deliberately move toward competitors, but only concentrating on doing everything well. The group's 24 Sevres, Le BonMarch, BonMarch and C will also sell other competitors' brands.

LVMH group's brand LV last year's cooperation with Supreme attracted many young people's attention.

However, some analysts believe that LVMH has suddenly changed its attitude towards the electricity supplier 180 times. At the same time, it has increased investment in digital and start-ups.

As the world's second largest luxury group, Kai Yun group has been leading the field of luxury in recent two years.

Its core brand Gucci was completely turned over by the help of millennial consumers, while the other brand Balenciaga, after inviting Vetements creative director Demna Gvasalia to join, has also become a very outstanding brand in the trend of innovation last year.

According to figures, last year's sales volume rose 27.2% to 15 billion 500 million euros, and net profit surged 120% to 1 billion 780 million euros. Gucci continued strong growth momentum, organic sales rose 42.6% to 1 billion 820 million euros in the fourth quarter, leading the luxury sector for 8 consecutive quarters, and dropping the price of Hermes on the basis of income regulation.

LVMH sales of leather goods sector increased by 13% to 15 billion 472 million euros last year.

In order to compete for young people and fight against Gucci, LVMH group began to deploy frequently.

Since last year, the Dior fashion department has been in the bag, LVMH has promoted Dior original CEO Sidney Toledano to the chief executive of the group fashion leather Department, Fendi original CEO Pietro Beccari joined the Dior, and the original president of the company joined the company. The group is trying to give the brand a new growth momentum.

After entering 2018, LVMH adjusted the adjustment target to men's clothing business. In the past 1 months, he announced 4 personnel changes of his brand menswear creative director.

In February of this year, LV Kim Jones, the creative director of the original men's wear, left office in March and became the artistic director of Dior Homme. Off-White founder Virgil Abloh succeeded him as the creative director of the LV men's wear.

It is noteworthy that after the new round of rotation adjustment, the designers who are responsible for LVMH's brand men's wear are famous for their street style. Men's clothing has become the focus of LVMH's younger pformation this year. The goal is to compete for the market share of young men.

At present, only 150 of the 450 shops in the world are selling men's clothing, but LV plans to increase by 25 to 28. The brand also intends to set up 6 independent men's clothing stores for Virgil Abloh this year.

Virgil Abloh stressed in the interview that LV has always been to serve the upstart, young and powerful consumer, so he hopes to use his understanding of street fashion and high-end fashion to promote the new market.

According to the US digital marketing agency EDITED, the growth rate of men's clothing will exceed women's clothing in the next three years, and the net income will be 2.3% and 2.2% respectively.

By 2020, men's clothing market value or exceeded 33 billion US dollars.

In addition, after tasting the sweetness of LV and Supreme cooperation, the German luxury luggage brand Rimowa, which was purchased in 2016 for $700 million, will also launch a joint series with Supreme.

It is reported that the Supreme x RIMOW series will be landed in stores and online official websites in New York, Losangeles and London in April 12th, and will be available for sale in Japan in April 14th, priced at $1600 and $1800 respectively.

According to analysis, in the Chinese market, the purchasing power of young consumers is strong, but the brand loyalty is becoming lower and the competition between brands is intensified. Now luxury brands are betting on young consumers with almost 80% of their energy.

In view of the unstable currency exchange rate and global geopolitics, LVMH said in the earnings report that it will continue to focus on its brand in the future, and at the same time strengthen its control over costs, and will suspend the release of its annual financial targets.

After the release of the earnings report, LVMH's share price rose by 5.36% to 276.3 euros per share, with a market value of about 140 billion euros and a record high.

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