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Tag: LVMH

  • LVMH Targets Asia: Luxury Market Expansion Amid Shifting Retail Landscape

    LVMH Targets Asia: Luxury Market Expansion Amid Shifting Retail Landscape

    In a move that underscores the ever-evolving world of retail, French luxury goods giant LVMH Moët Hennessy Louis Vuitton has set its sights on expansion in Asia. The company recently announced plans to increase its investment in the region, aiming to capture a larger share of the burgeoning luxury market. With a growing middle class and an appetite for high-end products, Asia has emerged as a hotspot for luxury retail, prompting LVMH to adapt its strategy and deepen its footprint.

    Luxury Frenzy: A Golden Opportunity

    This latest initiative aligns seamlessly with LVMH’s ongoing effort to cater to the region’s affluent consumers, who are increasingly favoring homegrown experiences over international travel. Notably, China remains at the forefront of this luxury boom, with more than 35% of global luxury sales now occurring within its borders. This trend showcases not just resilience but also a vibrant enthusiasm for luxury brands that many thought would wane. Spoiler alert: it hasn’t!

    A Blazing Trail in Retail Innovation

    To strategically position itself within this competitive landscape, LVMH plans to boost its digital presence. As online shopping transforms how consumers interact with brands, the company is shifting gears to enhance its e-commerce capabilities, making luxury shopping as easy as a click. It’s no coincidence that they are investing heavily in technology to create engaging platforms and luxurious online experiences that resemble their flagship stores.

    Tailored Approaches for Diverse Markets

    Each market within Asia offers unique opportunities and challenges, prompting LVMH to tailor its approach for various consumer preferences. While wealth is concentrated in urban centers, shopping behaviors fluctuate wildly between regions. With this understanding, LVMH is conducting in-depth market studies to customize both product lines and marketing strategies accordingly. This meticulous attention to detail could be the key to winning over luxury aficionados from Tokyo to Mumbai.

    The Road Ahead: Sustaining Growth

    As LVMH ramps up its investment in Asia, the company faces the challenge of maintaining sustainable growth amid shifting economic landscapes. Market analysts are closely monitoring how both local and global factors will influence consumer spending habits. The retailer’s leadership remains optimistic, betting that strong brand loyalty and innovative marketing will prevail in attracting the discerning customers lined up at the entrance of their luxurious establishments.

    Questions & Answers

    What is LVMH’s plan for expanding in Asia?
    LVMH aims to boost its investment in Asia to capture a larger share of the luxury market, enhancing their digital presence and focusing on tailored approaches for diverse regional markets.

    How significant is the luxury market growth in Asia?
    Asia, particularly China, represents over 35% of global luxury sales, highlighting its status as a key player in the luxury retail landscape with a rapidly growing middle class.

    What strategies is LVMH employing to reach consumers?
    The company is increasing its digital capabilities and conducting detailed market studies to adapt its product lines and marketing strategies to the distinct preferences of consumers across various Asian markets.

  • LVMH Sees Sales Dip: Fashion And Wine Departments Hit Hardest Amid Economic Uncertainty

    LVMH Sees Sales Dip: Fashion And Wine Departments Hit Hardest Amid Economic Uncertainty

    LVMH Moet Hennessy Louis Vuitton experienced a decrease in sales during the first half of the year, primarily due to weaker performance in its fashion and wine departments.

    Decreased Revenue

    The distinguished luxury conglomerate reported a 4 per cent decline in revenue, which totaled EUR39.8 billion (US$46.7 billion) over a six-month period. This figure represents a 3 per cent decrease in sales on an organic basis, including a 3 per cent decrease in the first quarter and a 4 per cent reduction in the second quarter.

    Impact on Different Divisions

    The major contributors to this decline were an 8 per cent drop in sales in both the fashion and leather goods division and the wine and spirits division. The group attributes the dip in fashion revenue to the strong growth it enjoyed last year, which was largely spurred by increased tourist spending in Japan, owing to a weaker yen. As for the wine segment, it suffered due to the influence of trade tensions impacting the critical markets of the US and China.

    Furthermore, perfume and cosmetics and watches and jewellery departments also reported a 1 per cent decline in sales. In contrast, the selective retailing segment remained flat, a result of continued growth at Sephora and the streamlining of operations at DFS.

    Profit Decline

    In terms of profit, there was a 15 per cent slide in profit from recurring operations which amounted to EUR9 billion, and the net profit was down 22 per cent to EUR5.6 billion.

    Despite these figures, the group maintains its confidence in the prevailing uncertain geopolitical and economic climate. It plans to continue focusing on bolstering the appeal of its brands.

    Questions & Answers

    What were the major contributors to LVMH’s decline in sales?
    The major contributors were an 8 per cent drop in sales in both the fashion and leather goods division and the wine and spirits division.

    What factors affected the fashion and wine segments?
    The dip in fashion revenue can be attributed to the strong growth it experienced last year due to increased tourist spending in Japan, owing to a weaker yen. The wine segment suffered due to trade tensions impacting the crucial markets of the US and China.

    What are LVMH’s plans moving forward amidst the economic downturn?
    The group plans to maintain its focus on enhancing the desirability of its brands, expressing confidence in the prevailing uncertain geopolitical and economic environment.

  • LVMH Explores Sale of Iconic Fashion Brand Marc Jacobs Amid Strategic Refocus

    LVMH Explores Sale of Iconic Fashion Brand Marc Jacobs Amid Strategic Refocus

    Rumors are swirling around LVMH’s Marc Jacobs label, as the luxury giant engages in discussions with interested buyers, including Authentic Brands Group, known for their acquisition of Reebok, and WHP Global. Sources close to the negotiations, who wished to remain anonymous due to the sensitive nature of the talks, suggest that a deal could be on the horizon.

    While Authentic Brands has declined to comment, WHP Global has yet to respond. Adding to the mix, Bluestar Alliance, the current owner of Brookstone, is also vying for the Marc Jacobs brand, which analysts estimate could fetch around $1 billion, according to a recent report by the Wall Street Journal.

    Neither LVMH, Marc Jacobs, nor Bluestar Alliance provided comments regarding the report from the WSJ. Previously, in 2024, Bloomberg revealed that LVMH was looking into strategic options for the Marc Jacobs brand after attracting interest from potential buyers, though the company denied such claims at that time.

    Founded by American designer Marc Jacobs in 1984, the brand is celebrated for its vibrant and eclectic designs that marry high fashion with street style. In a pivotal moment for both parties, LVMH appointed Jacobs to oversee Louis Vuitton in 1997 and subsequently acquired a stake in his own label.

    According to the Journal, a deal might be finalized soon, provided that discussions do not stall. This potential offloading of Marc Jacobs aligns with LVMH’s recent efforts to streamline its brand portfolio. Last year, the luxury conglomerate sold Off-White—initially established by Virgil Abloh—to Bluestar Alliance, although the sale price was not disclosed.

    In another notable move, Stella McCartney, who previously sold a minority stake of her brand to LVMH, reacquired that stake this year, just five years after the luxury group’s investment. McCartney has pledged to continue advising LVMH’s chief executive, Bernard Arnault, on sustainability issues—a topic she passionately champions.

    The luxury retail sector has been a hotbed for dealmaking recently, particularly in Europe. In a significant move, Prada acquired Versace from Capri Holdings in a staggering $1.4 billion deal, highlighting the competitive and dynamic nature of high-end fashion.

    While LVMH’s second-quarter sales, which encompass iconic products like Louis Vuitton handbags and Moët & Chandon champagne, fell slightly short of market expectations, analysts remain optimistic. The group’s shares have risen, buoyed by signs of recovering demand in the critical Chinese market, a beacon of hope amid challenging conditions.

    Analyst Adam Cochrane from Deutsche Bank noted that, despite the second-quarter results lacking brilliance, there were “glimmers of hope” on the revenue horizon. French luxury brands continue to navigate a tricky landscape, grappling with economic downturns and the looming specter of U.S. import tariffs.

    Questions & Answers

    Which companies are interested in acquiring Marc Jacobs?
    Authentic Brands Group and WHP Global are among the potential buyers, with Bluestar Alliance also expressing interest.

    What is the estimated value of the Marc Jacobs brand?
    Analysts estimate the brand could be valued at around $1 billion.

    What recent strategic move did Stella McCartney make concerning her brand?
    Stella McCartney has repurchased the minority stake that LVMH held in her label, five years after LVMH’s initial investment.

  • Luxury Brand Loro Piana Under Judicial Administration Amidst Labour Exploitation Allegations

    Luxury Brand Loro Piana Under Judicial Administration Amidst Labour Exploitation Allegations

    Luxury fashion brand Loro Piana, a subsidiary of LVMH, has been placed under judicial administration for one year by a Milan court following allegations of labour exploitation within its Italian supply chain.

    Labour Exploitation Allegations

    The court ruled that Loro Piana had failed to properly supervise its subcontractors, leading to labour violations through indirect suppliers. This makes Loro Piana the fifth luxury label to face such allegations since last year, joining the ranks of Dior, Valentino, Armani, and Alviero Martini.

    Investigations conducted by Italy’s Carabinieri labour protection unit unveiled that one of the workshops had employed 10 Chinese workers, five of whom were undocumented. These workers were allegedly forced to work up to 90 hours per week and were paid only EUR4 per hour (US$4.6). They were also illegally housed at the site.

    These allegations surfaced when a worker reported being assaulted over unpaid wages, leading to the arrest of the workshop owner and the closure of the facility.

    Judicial Administration

    Although Loro Piana is not subject to a criminal investigation, the court has appointed an external administrator to oversee improvements to the brand’s supply chain oversight. If the company demonstrates substantial progress, the judicial administration could be lifted early, as has happened in similar cases involving Dior and Armani.

    Loro Piana has attributed these violations to unauthorised subcontracting. It was discovered that the company had outsourced work via two front companies to Chinese-owned workshops in Milan. These workshops lacked the necessary capacity for manufacturing.

    The company has since severed ties with the supplier and pledged to reinforce its control and audit activities as a means of ensuring compliance with its ethical and quality standards.

    Company Background

    Loro Piana, acclaimed worldwide for its luxury cashmere and wool products, was acquired by LVMH in 2013. The founding family still retains a 20% stake in the company. This past June, Frederic Arnault, son of LVMH’s chairman and CEO Bernard Arnault, was appointed as the company’s CEO.

    Questions & Answers

    What led to the legal action against Loro Piana?
    A worker reported being physically assaulted over unpaid wages, sparking an investigation that revealed labour violations within the company’s supply chain.

    What measures has the court imposed on Loro Piana?
    The court has appointed an external administrator to supervise reforms to the brand’s supply chain oversight. The company has also been placed under judicial administration for a year.

    What steps has Loro Piana taken since the allegations surfaced?
    Loro Piana has ended its relationship with the implicated supplier and committed to enhancing its control and audit activities to ensure compliance with its ethical and quality standards.

  • LVMH deputy CEO shares strategy to manage tariffs

    LVMH deputy CEO shares strategy to manage tariffs

    French luxury powerhouse LVMH may have the ability to increase prices on their premium products by 2-3% annually without significantly impacting demand. This insight comes from the company’s deputy CEO, Stephane Bianchi, who shared the information during a recent parliamentary hearing in France. The discussion aimed to explore the group’s potential strategies for counteracting potential tariffs.

    Price Elasticity of Luxury Goods

    According to Bianchi, customers purchasing the group’s most exclusive items, such as high jewelry, are likely to tolerate modest price increases. However, he also warned that there are limitations to this tolerance, emphasizing that price elasticity for these products is not infinite.

    Recent developments in global trade politics have also influenced LVMH’s pricing strategies. The US president recently postponed a plan to impose 50% tariffs on imports from the European Union. Instead, negotiations are set to continue between Washington and the 27-nation European bloc, with a new deadline set for July 9th.

    Challenges with Raising Prices on Lower-Priced Products

    While price increases may be feasible for high-end goods, the same cannot be said for some of the lower-priced items in LVMH’s offerings. Specifically, the company may face issues with raising prices for its beauty products and cognac, according to Cecile Cabanis, the group’s finance chief. She indicated a lack of ability to adjust the prices of these items, stating that “the capacity to raise prices is not there.”

    Questions & Answers

    What is LVMH’s strategy for offsetting potential tariffs?
    LVMH’s strategy for offsetting potential tariffs includes the potential to increase prices on their premium products by 2-3% annually without significantly impacting demand.

    What are some limitations of this pricing strategy?
    Though price hikes may be absorbed by buyers of high-end products, there are bounds to their tolerance. Additionally, the company may struggle to adjust prices for lower-cost items, such as beauty products and cognac.

    How have global trade politics influenced LVMH’s pricing strategies?
    Recent developments, such as the US president’s decision to postpone tariffs on European imports, have influenced LVMH’s approach. This decision allows for further negotiations and potentially impacts the group’s pricing strategies for products sold in the US market.

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  • LVMH buys into Swedish label Our Legacy

    LVMH buys into Swedish label Our Legacy

    LVMH has acquired an undisclosed minority stake in Swedish fashion brand Our Legacy, The Business of Fashion reported.

    The transaction comes following Our Legacy posting sales of €40 million (US$42.9 million) in the year ended June 30.

    Our Legacy will use the proceeds of the transaction to strengthen operations and open flagship stores in key cities such as Paris, New York, Los Angeles, Tokyo, Shanghai, and Hong Kong.

    Currently, Our Legacy has two stores in Stockholm, one in London and one in Berlin. It also has three stores in South Korea, in partnership with local distributor Handsome Corp.

    The brand is set to open a new store in Paris in late next year.

    “It’s not like we needed the investment from a cash-flow perspective – our revenue figures doubled three years in a row and we achieved really healthy profitability,” Jockum Hallin, Our Legacy co-founder, told the BOF.

    “It’s more to look to the future as we build the next era.”

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  • LVMH chief Bernard Arnault to visit China in June

    LVMH chief Bernard Arnault to visit China in June

    LVMH.PA chief Bernard Arnault is set to visit China, two sources told Reuters on Thursday, as European luxury goods makers closely track the pace of recovery of the key market following three years of COVID disruptions.

    One of the sources close to the matter said Arnault’s visit to the all-important Chinese market, which comes after high-profile visits to the country this week by JPMorgan Chase & Co JPM.NCEO Jamie Dimon and Tesla chief Elon Musk, will take place later this month.

    LVMH, home to brands ranging from Moet to Givenchy, declined to comment.

    The sources didn’t give a reason for the trip or say where in the country Arnault was likely to visit.

    The LVMH chairman and chief executive met with Chinese Commerce Minister Wang Wentao in Paris in April at the Avenue Montaigne flagship store of the group’s Christian Dior label.

    Arnault’s daughter Delphine Arnault, CEO of Dior, as well as other top LVMH executives attended the meeting, and the group pledged take part in China’s International Import Expo, which will be held in Shanghai in November.

    Chinese officials have been eager to emphasize the country is open for business since lifting lockdowns in December. The recovery has been patchy but the luxury sector has outperformed other consumer categories as wealthy consumers have maintained their spending habits on the Mainland.

    The planned visit for Arnault comes at a critical time for LVMH’s reboot of U.S. jeweler Tiffany, its largest acquisition ever, which it seeks to expand in China as part of a strategy to catch up with larger rival Cartier.

    A rebound in China helped lift LVMH’s first-quarter sales, which grew 17%.

    Executives from other luxury companies are also emphasizing China, especially as sector sales in the United States show signs of easing off of a strong, post-pandemic surge.

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  • Luxury giants bank on Chinese return as Western shoppers sober up

    Luxury giants bank on Chinese return as Western shoppers sober up

    The focus of the luxury industry is shifting back to China, with hopes that its high-end spenders will once again splurge on designer goods during Lunar New Year festivities as Beijing relaxes Covid curbs after three long years.

    Quarterly results from LVMH and Europe’s other luxury goods companies will offer glimpses of the toll of last year’s Covid-related disruptions in China, even as the companies roll out pricey new collections tied to the Year of the Rabbit.

    They are expected to see a deceleration in sales growth over the quarter as the post-pandemic splurge on designer fashions begins to ease in the United States and Europe.

    Consensus estimates cited by UBS are for fourth-quarter sales growth of 7 per cent at LVMH, which releases full-year results on Thursday, and for a sales decline of 2 per cent at Kering, which reports results on February 15. Hermes, which reports fourth-quarter results on February 17, is expected to show sales growth of 17 per cent, a decline from 24 per cent in the third quarter.

    The industry’s showing in China will highlight the hit from lockdowns and its subsequent exit from a zero-Covid policy, which has spurred a surge of infections in the world’s second-largest economy. Luxury spending by Chinese nationals had dipped from 33 per cent of the global personal luxury goods market in 2019 to as little as 17 per cent last year, according to estimates from consultancy Bain.

    “We do believe they will come back to the luxury sector in a heavy way, to catch up on what they couldn’t do in 2022,” said Caroline Reyl, head of Premium Brands at Pictet Asset Management, referring to Chinese consumers.

    End-of-year trading updates last week from Britain’s Burberry and Cartier-owner Richemont gave investors a peek at the knock.

    Richemont missed market estimates after sales in China plunged by a quarter. Customer traffic at its stores dwindled and staff at times were not available. Many stores reduced hours or closed temporarily. Burberry’s like-for-like sales growth slowed sharply to 1 per cent in the quarter to the end of December after a 23 per cent fall in mainland China.

    But Burberry said it was optimistic consumers in China would start spending again and Richemont saw a rebound there before the holiday, adding to rising expectations for the months ahead.

    China is forecast to become the luxury industry’s biggest market by 2025. The luxury sector is among the largest expected winners from China’s loosening of restrictions that kept shoppers out of stores for months, with shares at LVMH, Europe’s most valuable listed company worth about US$433.1 billion and Hermes recently hitting historic highs.

    At Paris fashion shows, which run through the end of this week, Chinese buyers, a staple at such events before the pandemic hit, still haven’t returned in droves.

    Although the Chinese are expected to initially resume travelling within Asia, Europe is a region that particularly stands to benefit from a return of Chinese tourists. Reyl told Reuters she believes Chinese shoppers may begin to return to Europe in a noticeable way at the end of the second quarter or during the second half of this year.

    In the United States, some Americans are cutting back discretionary spending due to decades-high inflation. Credit card data from Citigroup showed that luxury spending in the United States in December was down 10 per cent year-on-year and, compared to 2019, turned negative, down 2 per cent, largely due to weaker business in department stores and online platforms.

    However, travelling Americans likely continued boosting the fortunes of luxury labels in Europe, with US nationals leading a recovery in tax-free shopping in Europe, according to December data from Global Blue.

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  • LVMH names new CEOs for Louis Vuitton and Dior

    LVMH names new CEOs for Louis Vuitton and Dior

    LVMH Moët Hennessy Louis Vuitton SE, Europe’s most valuable company, is embarking on one of its biggest management shake-ups in years, elevating Pietro Beccari to lead Louis Vuitton and tapping Delphine Arnault, daughter of Chief Executive Bernard Arnault, to run Christian Dior.

    The changes announced Wednesday, effective Feb. 1, involve two of the luxury giant’s largest brands and some of its best-known managers. Both Louis Vuitton and Dior have been on a tear, most recently riding a postpandemic boom in luxury spending that so far has shown little sign of easing.

    LVMH emerged from the pandemic as Europe’s largest company by market value, far ahead of the continent’s industrial stalwarts such as Shell PLC, Airbus SE and Volkswagen AG. Mr. Arnault, meanwhile, has recently usurped Elon Musk as the world’s richest person.

    This year, loosened Covid-19 restrictions in China—one of the luxury industry’s biggest markets—have further boosted LVMH’s shares, which rose as much as 2% on Wednesday to hit a record intraday high, bringing year-to-date gains to 13%.

    In taking the helm of Louis Vuitton, Mr. Beccari succeeds Michael Burke, who has led the fashion brand for a decade. Mr. Burke is one of the most trusted lieutenants of Mr. Arnault—LVMH’s CEO and controlling shareholder—having worked with him since the 1980s. LVMH said Mr. Burke, 66 years old, would now assume new duties, reporting directly to Mr. Arnault.

    Mr. Beccari currently leads Dior, where he will be succeeded by Delphine Arnault, the eldest of Mr. Arnault’s five children.

    The management changes mark a homecoming of sorts for Ms. Arnault, who worked for 12 years at Dior before joining Louis Vuitton as No. 2 in 2013. It is also the first time she takes on a CEO job at one of LVMH’s brands. At Louis Vuitton, Ms. Arnault was in charge of all product-related activities. She was recently responsible for a collaboration between the brand and Japanese artist Yayoi Kusama for a major new collection.

    Ms. Arnault’s elevation will be closely watched in Paris business circles, where monitoring the progress of Mr. Arnault’s children with a view to potential succession is a favorite pastime. All of Mr. Arnault’s children have responsibilities at the luxury conglomerate that he has built over decades. Last month, Mr. Arnault named his eldest son, Antoine Arnault, CEO of the family holding company that owns the bulk of the family’s stake in LVMH.

    The challenge for both Ms. Arnault and Mr. Beccari will be to keep the growth humming at Louis Vuitton and Dior as the global economy confronts challenges ranging from high inflation to Covid-related disruption in China and the war in Ukraine. In November, consulting firm Bain & Co. forecast that sales of personal luxury goods would rise between 3% and 8% in 2023, a sharp slowdown on last year’s growth that it estimated would be 22%.

    The strength of Louis Vuitton and Dior, which in recent years have both proved popular with shoppers regardless of the fashion trends of the day, have been instrumental in helping LVMH become the world’s biggest purveyor of luxury goods, extending its lead over rivals such as Gucci-owner Kering SA and Cie. Financière Richemont SA, which owns Cartier.

    In returning to Louis Vuitton, Mr. Beccari rejoins a leather-goods juggernaut that he first joined in 2006. In recent years, the Italian executive has overseen remarkable growth at Dior, where analysts estimate revenue has more than tripled over the past five years. At Dior, Mr. Beccari’s achievements include the opening of a huge new flagship store in Paris’s luxury shopping district that extends over five levels.

    Mr. Beccari has also become known for pushing an array of high-visibility projects around the globe. Recent examples include a fashion show last month in front of Egypt’s ancient Giza pyramids as well as a major partnership with Harrod’s, the luxury British department store, for the Christmas season.

    Mr. Beccari now takes responsibility for LVMH’s biggest brand. LVMH doesn’t disclose revenue for individual brands, though analysts at Citi estimate that revenue at Louis Vuitton rose to 21.8 billion euros, equivalent to $23.40 billion, last year. “Vuitton has become one of the strongest and most resilient luxury brands,” they said Wednesday.

    That rise has come under the leadership of Mr. Burke, whose tenure at Louis Vuitton included the brand’s much-hyped collaboration with cult streetwear brand Supreme in 2017 as well as tapping the late Virgil Abloh as menswear artistic director the following year.

    On Wednesday, Mr. Arnault credited Mr. Burke with extending Louis Vuitton’s lead over its competitors and promoting the brand’s heritage while anchoring it in modernity.

    A dual French-U.S. citizen, Mr. Burke has worked for Mr. Arnault since graduating from business school, initially on real-estate investments in the U.S. before taking the helm of Christian Dior USA in 1986.

    He also oversaw the integration of U.S. jeweler Tiffany’s into LVMH. As part of the organizational changes announced on Wednesday, Tiffany’s—which LVMH bought for more than $15 billion in 2021—will now be housed in the group’s watches & jewelry division.

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  • LVMH to launch Stella beauty Maison with Stella McCartney

    LVMH to launch Stella beauty Maison with Stella McCartney

    Following a successful partnership with LVMH which began in 2019, Stella McCartney has collaborated with the LVMH Beauty division to develop her new skincare line, STELLA by Stella McCartney.

    After pioneering the conscious luxury fashion industry, Stella’s ambition is to offer an alternative to luxury skincare, an Alter-Care™.  A new approach that supports caring for ourselves and Mother Earth in perfect harmony.  Rooted in nature, with Stella’s vegan and cruelty-free principles at its heart, this ‘conscious luxury’ skincare line is natural, effective, and responsible.

    “I am delighted that Stella McCartney, after pioneering a sustainable and responsible luxury fashion, is now partnering with LVMH, committed to change the codes of cosmetics, the packaging and the ingredients. The launch of STELLA by Stella McCartney perfectly resonates with the Group’s longstanding commitment toward sustainability and we are proud to support it”, said Antoine Arnault, Image & Environment, LVMH.

    “We set out with an idea, and because we didn’t want to compromise – on outstanding results, the origin of our ingredients, and, of course, ensuring we minimised our impact on Mother Earth – we kept on trying.  We worked hard for almost three years with LVMH constantly evolving and aiming for what I felt was possible: rooted in nature, truly effective and responsible skincare. It’s a game changer and I want to share it with everyone.  I believe the consumer needs to know there’s another way, that they have a choice.”  said Stella McCartney.

    Based on Stella’s personal philosophy of using ‘only what you need’, the range consists of three essential products: Reset Cleanser, Alter-Care Serum and Restore Cream. The line-up is a culmination of three years’ worth of innovation and exploration with LVMH Recherche, the Group’s Beauty R&D unit. Offering impressive, clinically-proven results, this new range has been formulated to work in harmony with the skin, supporting its key functions of regeneration and protection.

    Each stage of the product lifecycle has been challenged to minimise its impact – from the ingredients to the packaging, to operations all the way through to consumer usage.  All product formulas are made with at least 99% natural-origin ingredients, and each is available in a unique eco-conscious refill.

    The line has a uniquely beautiful scent, ‘High Cliff’, created in collaboration with renowned perfumer Francis Kurkdjian, Founder and Artistic Director of Maison Francis Kurkdjian and Perfume Creation Director of Parfums Christian Dior.

    All the products will be available on www.stellamccartneybeauty.com and through a selection of UK retailers and boutiques including: the Stella McCartney UK flagship store on Old Bond Street from early September and Space NK from mid-September.

    Stella McCartney has chosen to support the conservation NGO Wetlands International, committing to donate 1% of the net sales of STELLA skincare.

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  • LVMH sales soar despite China slowdown

    LVMH sales soar despite China slowdown

    LVMH sales jumped in the second quarter as the owner of Louis Vuitton and Dom Perignon continued to thrive in spite of concerns about slowing economic activity.

    The luxury conglomerate was helped by strong sales of its fashion and leather goods. Solid results in Europe, the US and Japan also helped offset a poor performance in China, which suffered due to lockdowns in the second quarter.

    The results underscore the French company’s resilience. LVMH’s diverse offerings — from handbags to spirits to luxury hotel stays — and global footprint are enabling it to withstand a worsening economic outlook. It also shows that well-heeled customers aren’t feeling a global surge in inflation that has caused lower-income shoppers to rein in spending at retailers such as Walmart Inc.

    LVMH’s biggest brand, Louis Vuitton, has been able to maintain profitability “at an exceptional level,” during the first half, the company said. Its executives have been actively restricting entry-priced products such as its classic monogram-coated canvas bags. Instead, the brand is promoting higher-priced leather handbags.

    “The top end of the portfolio has done better than the entry price, but it’s on purpose because we intend to rebalance the two,” LVMH Chief Financial Officer Jean-Jacques Guiony said about Vuitton’s strategy during the analyst call.

    Geographically, LVMH was helped by a 48 percent revenue recovery in Europe, followed by solid rebounds in Japan and the US. Asia, excluding Japan, barely grew during the quarter.

    LVMH’s outlook on the US economy isn’t “particularly gloomy and pessimistic,” Guiony said, citing recent quarterly performance. “We’re trying to manage the business for the growth it can generate.”

    Should there be a downturn, Guiony said LVMH would react swiftly by cutting costs and store openings. Past experience, notably during the 2008 global financial crisis, has shown LVMH has a “strong rebound capacity,” he added.

    In China, store traffic is still “way below” last year’s levels, Guiony said, adding that LVMH is waiting to see how demand evolves there.

    The luxury conglomerate didn’t experience pushback from customers after raising prices across the board this year, mostly in the first quarter. Guiony doesn’t expect LVMH’s fashion and leather brands to be very active when it comes to further price increases in the second half of the year. Thanks to the recent appreciation of the dollar against the euro, LVMH noticed more American tourists spending in Europe toward the end of last month, Guiony said.

    LVMH’s wine and spirits division was a notable outperformer during the period. The division — which suffered some supply constraints in the past — bounced back with organic revenue jumping 30 percent. It was helped by demand for Champagne in Europe, the US and Japan, as well as price increases for Hennessy Cognac.

    First-half profit from recurring operations rose to 10.24 billion euros ($10.35 billion). Analysts expected 9.51 billion euros. Organic revenue for its biggest fashion and leather goods unit in the second quarter grew 19 percent, better than the 17 percent gain analysts expected.

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  • LVMH takes control of Off-White label

    LVMH takes control of Off-White label

    French luxury group LVMH is acquiring a 60% stake in Off-White, the label of designer Virgil Abloh who has been responsible for Louis Vuitton’s men’s collections since 2018.

    LVMH reports that it has taken a majority stake in Off-White, the brand launched in Milan in 2013 by American designer Virgil Abloh. This will give the world’s largest luxury goods company a firm foothold in streetwear, a highly profitable segment that has risen to prominence within haute couture in recent years.

    LVMH will own 60% of the brand while the founder will retain a 40% stake. Further details of the transaction were not disclosed, writes Les Echos.

    Until now, Off-White was controlled by New Guards, an Italian group that also owns Palm Angels and Heron Preston. New Guards was bought by Farfetch in August 2019 for around 600 million euros. As a licensee, Farfetch will continue to operate the brand.

    Within its segment, Off-White is a major player. The label already has 56 stores worldwide and counts more than 10 million followers on Instagram. In February, Andrea Grilli, the big boss of New Guards, announced that he is aiming for sales of one billion dollars within five to ten years.

    The deal highlights the ever-closer partnership between Abloh and the French luxury house. The story began in 2007, when the designer of Ghanaian-American descent, who at the time was still artistic director for Kanye West, collaborated on the creation of a Fendi collection. In 2015, Abloh was then a finalist for the LVMH Young Designer Award. Three years ago, he was appointed head of Louis Vuitton’s men’s collections.

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  • LVMH’s shuttered Thomas Pink brand to be revived

    LVMH’s shuttered Thomas Pink brand to be revived

    British shirt-maker Thomas Pink is set to be revived after former JD Sports executive Nick Preston acquired the brand.

    According to the Mail on Sunday, Nick Preston has brokered a deal to take control of LVMH’s shirtmaker brand, including its intellectual property but not its website or shops.

    The retailer ceased operations last year amid the Covid-19 pandemic, as LVMH Group was seeking to sell the brand. Last December, the French luxury group removed Thomas Pink from its “Fashion and Leather Goods” website page.

    According to Retail Gazette, Thomas Pink updated its own website last month, saying “We’re excited to announce that we’re returning to our roots with the same team that has helped build Thomas Pink Shirtmakers over the years”.

    “We have some things to iron out and button-up, but will be back soon with an improved website to offer you the highest quality English shirting made for modern life that you have come to know and love.”

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  • LVMH, Rihanna ‘suspend’ Fenty fashion label

    LVMH, Rihanna ‘suspend’ Fenty fashion label

    LVMH and Rihanna are suspending the ready-to-wear operations of Fenty, the pop singer’s brand, less than two years after its debut as the pandemic pummels demand for clothing.

    “Rihanna and LVMH have jointly made the decision to put on hold the ready-to-wear activity, based in Europe, pending better conditions,” the French luxury conglomerate said in a statement Wednesday.

    Fenty was launched to great fanfare in May 2019 and represented a rare effort by LVMH to build a new fashion brand from scratch. The luxury giant has typically focused on acquiring businesses with prestigious legacies, whether it’s handbag maker Louis Vuitton or Champagne producer Moet & Chandon.

    In a separate statement on Wednesday, L Catterton, the private equity fund backed by LVMH founder and billionaire Bernard Arnault, led a $115 million series B funding along with other investors into Savage X Fenty, Rihanna’s lingerie brand.

    The funds will help power the underwear business’s next phase of growth and enable its retail expansion after it experienced an “explosive” rise in revenue in the past year, the fund’s statement said. The goal is to support “the Fenty ecosystem focusing on lingerie, cosmetics, and skincare,” according to LVMH.

    “Celebrity-originated brands can be very popular very quickly, but their staying power is questionable,” Luca Solca, an analyst at Sanford C. Bernstein, said by email. “The risk is that they end up being a flash in the pan.”

    Rihanna’s Fenty Beauty make-up brand has 10.5 million followers on Instagram, compared with one million for Fenty ready-to-wear. The pandemic has impacted the personal luxury goods sector differently, with the apparel category suffering the most, according to a study by Bain consultants.

    “We are still in a launching phase and we have to figure out exactly what is the right offer,” LVMH Chief Financial Officer Jean-Jacques Guiony told analysts about Fenty in October. “It’s still a work in progress.”

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  • Thriving Louis Vuitton offsets drop in sales at luxury group LVMH

    Thriving Louis Vuitton offsets drop in sales at luxury group LVMH

    Booming sales at LVMH’s fashion brands like Louis Vuitton, particularly in China, helped to cushion the impact of the coronavirus pandemic, which has crimped revenues at the French luxury group.

    LVMH, which closed a $15.8 billion acquisition of U.S. jeweler Tiffany in the middle of the pandemic, has like rivals taken a hit as governments the world over forced retailers to close shops during lockdowns.

    Declining international travel has also deprived luxury goods companies of tourist revenues.

    But an improving backdrop in China, one of the world’s biggest markets for luxury fashions and which had eased COVID-19 measures by the second half of 2020, has helped some companies to rebound.

    LVMH’s fashion and leather goods business, home to Vuitton handbags and other brands like Christian Dior, performed better than analysts expected in the fourth quarter, with sales rising 18% year-on-year on a comparable basis. Louis Vuitton is the group’s biggest revenue driver.

    That was an improvement on the third quarter, when like-for-like sales, which strips out acquisitions and currency effects, were already up 12%.

    “The strong beat should get LVMH’s share price home and dry,” Berstein analyst Luca Solca said in a note.

    LVMH Financial Chief Jean-Jacques Guiony told a conference call that new product launches planned before the pandemic – like a Vuitton handbag named after the Pont Neuf bridge in Paris – had helped the brand.

    LVMH – which is setting the tone for luxury rivals such as Gucci-owned Kering with its earnings – has also kept up with marketing spending while some smaller peers have cut back, and holding catwalk shows in cities such as Shanghai despite the crisis had helped, Guiony said.

    “Louis Vuitton and Dior were taking the bulk of customers’ attention when nobody was talking,” he added.

    LVMH’s billionaire boss Bernard Arnault said in a statement that the group was well placed to build on a market recovery.

    Guiony said the company had no visibility, however, on the outlook for China, at a time when new restrictions to fight a resurgence of COVID-19 cases risk overshadowing Chinese New Year festivities in mid-February, usually a major shopping highlight.

    LVMH also owns spirits brands, like Hennessy cognac, and operates airport duty-free shops, which have struggled.

    The French company went ahead with its Tiffany deal during the pandemic but ended up renegotiating the price tag slightly downwards. LVMH is now betting on growing its clout in jewelry, a resilient area of the luxury goods business.

    LVMH overall group sales for the October to December period came in at 14.3 billion euros, in line with forecasts.

    For 2020 as a whole, LVMH’s revenues reached 44.65 billion euros, falling 16% from a year earlier on a like-for-like basis.

    LVMH’s net profit reached 4.7 billion euros ($5.71 billion), down 34% on a year earlier, while profits from recurring operations – or earnings before interest and tax – fell 28% but vastly exceeded analyst forecasts.

    The group said it would propose a dividend payout against 2020 results of 6 euros per share, including a 2 euros per share interim dividend paid in December.

    It had cut its dividend last year to 4.80 euros during the COVID-19 crisis.