Hermès may have everyone's attention at the moment following this week's announcement of the impending departure of its womenswear director, Christophe Lemaire and his replacement by The Row's Nadège Vanhee-Cybulski. However, LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, parent company to Louis Vuitton, Givenchy, Dior, Fendi, Céline, Marc Jacobs, Loewe and more, announced today that it recorded revenue of nearly $19 billion in the first half of 2014, an increase of 3%. Organic revenue growth was 5% compared to the same period in 2013. According to a statement from the Paris-based luxury conglomerate, it "continued to grow in the United States and Asia. Europe demonstrated resilience despite a still challenging economic environment. With organic growth of 3%, the second quarter showed comparable regional trends to the first quarter, except in Japan, which had experienced particularly strong growth during the first quarter." While profit from recurring operations fell 5 percent to $3.5 billion, Paris-based LVMH said today in a statement after European markets closed, its Fashion and Leather Goods division did not report negative growth and its Perfume and Cosmetics division actually grew by 2%. Revenues grew in nearly every one of LVMH's division, with a reported 7% increase for the Fashion and Leather Goods division.
As we know, LVMH has been introducing more expensive Louis Vuitton handbags. This comes in connection with increasing investments in its other fashion and accessories brands amid softening demand for expensive liquor and watches, according to Bloomberg. Moreover, last week, Remy Cointreau SA, a brand in LVMH's Wine and Spirits division, reported a 15 percent drop in quarterly sales at its Remy Martin cognac unit, hurt by China’s clampdown on government corruption and lavish spending practices. Thus, LVMH ultimately reported first-half earnings that trailed estimates as the strong euro and weaker demand for premium cognac weighed on growth.
According to the LVMH's report: Louis Vuitton continues its strong creative momentum with new artistic director, Nicolas Ghesquière, receiving an enthusiastic response to his first show. The innovations in leather goods are seeing strong success. Fendi benefited from the focus on its iconic bags, for which sales progressed strongly. Céline’s growth continues to be driven by the success of its leather goods and the rapid development of footwear. Several Céline flagship stores were opened around the world, particularly in London, Tokyo and Paris. Other brands, such as Givenchy, Berluti and Kenzo, continued to strengthen their positions.
Of the results, Bernard Arnault, Chairman and CEO of LVMH, stated: “The results of the first half demonstrate LVMH’s excellent resilience, thanks to the strength of its brands and the responsiveness of its organization in a climate of economic and financial uncertainties. The first half of the year also witnessed the smooth integration of Loro Piana into the Group. Following the first half’s good resilience, it is with confidence that we approach the second half of the year and rely on the creativity and quality of our products, and the effectiveness of our teams, to pursue further market share gains in our traditional markets, as well as in high potential emerging territories.”