In a statement on Friday announcing the availability of its Management Report of the Board of Directors, LVMH Moët Hennessy Louis Vuitton addressed the impact of continued spread of the COVID-19 virus, noting that in the “particularly uncertain environment, [it] will maintain a strategy focused on the preservation of the value of its brands, supported by the exceptional quality of its products and reactivity of its teams.”
“In the short term,” the Paris-based group – which owns Louis Vuitton, Christian Dior, Givenchy, Celine, and soon, Tiffany & Co., among dozens of other fashion and non-fashion brands – says that “the measures taken by public authorities to combat the Covid-19 pandemic have resulted in the closure of production sites and stores in several countries which will have an impact on the group’s results. This impact cannot be accurately calculated at this time without knowing the timing of a return to normal in these countries.”
As for what can be ascertained, LVMH asserted ahead of the publication of its Consolidated Revenue for the first quarter on Thursday, April 16, that while it does not currently know the revenue total, “it can be reasonably expected that it will decrease in a range between 10 and 20% compared to the same period last year.”
The release comes a week after fellow conglomerate Kering revealed in its “Initial Estimate Of COVID-19 Epidemic Impact” that due to “the progression of COVID-19 in all of its key markets and the impact on the activity of its Houses,” it estimates that consolidated revenue for the first quarter of 2020, ending March 31, will be down by between 13 percent and 14 percent in reported terms (approximately 15 percent in comparable terms) compared to the first quarter of 2019.
Meanwhile, the group announced on March 15 that “given the risk of a shortage of hydroalcoholic gel in France, [chairman] Bernard Arnault has instructed the LVMH Perfumes & Cosmetics business to prepare its production sites to manufacture substantial quantities of hydroalcoholic gel to be provided to public authorities.” Since then, LVMH revealed that following “the retooling of its Perfumes & Cosmetics production units,” it has pledged to help address the surgical mask shortage France is currently facing. “By virtue of its global distribution network, LVMH has managed to secure an order with a Chinese industrial supplier for a delivery of 10 million masks in France in the coming days (seven million surgical masks and three million FFP2 masks),” the group stated.