Louis Vuitton Moët Hennessy (LVMH) delivered strong results in its first quarter after feeling the impact of Covid-19 first hand last year, with overall revenue up 32 per cent on the same period of 2020.
And, while all but one business group contributed to the group’s performance, one in particular shone through.
“The luxury group’s watches & jewellery segment experienced the greatest revenue growth of 137.8 per cent during [the first quarter], mostly driven by the successful integration of Tiffany & Co into its portfolio,” said GlobalData analyst Pippa Stephens.
Reported revenue of LVMH’s watches and jewellery segment more than doubled, from €792 million to €1.8 billion (US$947 million to $2.15 billion). Organic revenue growth, however, was 35 per cent – with the cause for the disparity being the successful, albeit troubled, integration of Tiffany & Co.
The real star of the show, according to Stephens, is LVMH’s impressive organic growth in its fashion and leather goods department.
“Its fashion and leather goods division saw the strongest organic revenue increase, with sales rising €2.1 billion to €6.7 billion ($2.5 billion to $8 billion), as well as 37 per cent organic growth versus 2019,” Stephens said.
“Despite the apparel market being the retail sector hardest hit by the pandemic, the strong desirability of its brands [encouraged] consumers to continue paying for their luxury products.”
This was helped along by the relaunch of Louis Vuitton’s historic Tokyo store in Ginza, and strong performances from Christian Dior, Marc Jacobs, and Celine.
And, as customer expectations shift further toward sustainability following the difficulties and turbulence of last year, the retail group successfully outlined a number of strong environmental initiatives – which will likely improve its perceptions among consumers further.
“As well as launching a new initiative with Unesco to combat deforestation, it has also outlined the plans of its new biodiversity strategy, which includes a pledge to promote animal welfare in the procurement of raw materials,” said Stephens.
“With many of its brands like Louis Vuitton and Dior often criticised for their use of fur and animal skins, this decision is definitely a step in the right direction, however, they should also aim to remove these materials entirely in the future to cater towards consumers’ rapidly changing views.”