LVMH unit sales growth disappoints

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/064f5692-a5fb-11e2-9b77-00144feabdc0.html#ixzz2Qsgk4S52 “Louis Vuitton is unquestionably at a delicate juncture,” said Luca Solca, analyst at Exane BNP Paribas in a note before the sales figures were released. “It depends on aspirational demand and new consumers. In the past 12 months, austerity has depressed domestic aspirational demand in Europe, and a lull in Chinese growth has slowed the rate at which new luxury consumers are minted. Hence LV’s lacklustre performance relative to the recent past.” Reported sales in fashion and leather goods were up 0.4 per cent in the first three months of the year, compared with the same quarter last year, probably reflecting fewer store openings at Louis Vuitton, which some analysts believe may be overdistributed. “The risk of ubiquity is that . . . the consumer, seeing the same products everywhere, all the time, starts to perceive a brand as being too common,” said analysts at HSBC in a note published in January. Total sales at LVMH were up 7 per cent organically and 6 per cent on a reported basis in the first quarter. Apart from selective retailing – which includes the cosmetics chain Sephora and DFS airport retailers – which grew by 17 per cent in the first quarter, sales growth in the other businesses was in single-digits. Sales rose by 7 per cent organically in wines and spirits, by 5 per cent in perfumes and cosmetics and by 2 per cent in watches and jewellery.

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