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July 25, 2013 11:43 pm
LVMH, the French luxury group, said on Thursday that solid demand for its fashion and leather goods and wines and spirits division helped produce a 6 per cent increase in reported sales during the first half of the year.
But the rate of growth remained well down on the heady double-digit expansion the maker of Louis Vuitton bags, Dior perfume and Dom Pérignon champagne enjoyed until about a year ago before demand in key Asian markets began to ease.
Like-for-like sales in fashion and leather goods, the group’s flagship division, reached €4.7bn during the first half, an increase of 5 per cent on the same period last year. The figure reflected a slight pick-up in the second quarter after a disappointing first three months when growth was just 3 per cent.
Overall, sales during the first half reached €13.7bn, up from €12.97bn during the same period last year. Profit from recurring operations during the period rose just 2 per cent to €2.71bn – a shade under analysts’ expectations.
In spite of the lower growth rates, Bernard Arnault, chairman and chief executive, said: “It is with confidence that we approach the second half of the year.” The group said that it expected to gain market share though it underscored “an uncertain European economic environment”.
Earlier this month, the group showed its continued appetite for expansion as it paid €2bn for a majority stake in Loro Piana, making the fashion house famed for its baby cashmere the latest in a string of Italian family-owned companies to cede control to French luxury goods groups.
LVMH’s results came as Kering, owner of the label Gucci and Puma sportswear, said improving sales from its luxury division between April and the end of June had offset falling revenue from its Puma brand.
The group, which last month changed its name from PPR, reported a 9.4 per cent increase in like-for-like luxury sales during the second quarter compared with the same period of 2012. The increase was just 6.4 per cent during the first three months of the year.
The Paris-based group, which includes brands such as Bottega Veneta and Girard-Perregaux, said overall sales reached €2.31bn between April and the end of June – a 5.2 per cent increase on a comparable basis with the same period of 2012. That was in line with analysts’ forecasts.
The group said sales at Gucci, the group’s most important brand by sales, rose 4.1 per cent on a comparable basis during the second quarter to €888.9m.
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