Luxury Goods

The Wall Street Journal is reporting luxury brand LVMH saw profits sore 73% for the 2010 calendar year.  LVMH owns many luxury brands, including Louis Vuitton and Fendi fashion houses to Moët Chandon champagne and TAG Heuer watches. Part of the large increase was based upon the acquisition of Hermes.  Also, much of the growth was derived from new markets, such as China and Brazil,although not as strong as emerging markets, while he traditional markets saw growth as well.  The US saw increases of 14% LVMH and European markets saw increases of 12%.

As noted in past AW posts, luxury retail brands, including Tiffany and Burberry, and LVMH have all report strong 2010 results, and especially during the last quarter.

The report states

Within LVMH's many businesses, its Louis Vuitton brand was—as always—the driver of sales and profit growth. Sales of the company's fashion and leather-goods division, which includes Vuitton, rose 20% to €2.12 billion in the fourth quarter.

"LVMH enters 2011 with confidence and has set itself the objective of increasing, once again, its global leadership position in luxury goods," the company said in a statement.

The company also added that, faced with production constraints, it is planning to open a new production site in France. Louis Vuitton currently has nearly a dozen production sites in France, and a handful in Italy, Switzerland and Spain.

Speaking at a news conference on Friday, executives said they planned to expand the distribution networks of several of the company's smaller brands, and will open new stores for its TAG Heuer watches in China, and a first store for its Zenith watch brand in Hong Kong.

LVMH said its champagne brands recovered strongly over the year, with revenue at the wine and spirits division rising 19% to €3.26 billion, though sales growth slowed to 14% in the last quarter.

To read the full article, click HERE.

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