LVMH Watches & Jewelry Up 13%
-- JCK-Jewelers Circular Keystone, 2/6/2008 7:25:00 AM
LVMH Moët Hennessy Louis Vuitton Watches & Jewelry category sales increased 13 percent to $1.2 billion in 2007, led by strong growth in the TAG Heuer watch brand. When stripping away currency fluctuations, the company reported an organic revenue increase of 19 percent for the year, which the company said was "considerably better than that of the industry."
After having almost quadrupled in the jewelry and watch category for 2006, its profit from recurring operations grew by 76 percent, thus raising its current operating margin to 17 percent in 2007, LCMH said. TAG Heuer, driven by its upscale positioning and continued innovation, registered strong progress in all of its markets.
Other jewelry and watch highlights for the company included the strengthening of its iconic lines Aquaracer, Link and Carrera, and the launch of two new watch innovations, the Calibre S movement and the new Grand Carrera line. Zenith confirmed its position as a high-end watchmaker and successfully rolled out its new sports line Defy. Montres Dior benefited from the exceptional success of the watch Christal. Chaumet continued to expand its network, notably in Asia. De Beers accelerated its store opening program.
Overall, the world’s leading luxury products group said net profit for the year ended Dec. 31 rose 8 percent to nearly $3 billion. Revenue grew 8 percent to $24.1 billion.
LVMH said its performance is even more noteworthy in view of the negative impact of currency rates, which mainly affected the second half of the year. The company reported a 12 percent increase to $5.2 billion. At constant exchange rates, profit from recurring operations increased by 20 percent in 2007.
Following growth of 30 percent in 2006, the Group share of net profit increased by 8 percent to nearly $3 billion in 2007. This increase is due to the change in net financial income, which in 2006 included a high level of capital gains on divestments.
“The excellent performance in 2007 illustrates the vitality of our major brands which continue to strengthen and gain market share," said Bernard Arnault, LVMH chairman and chief executive officer. "The year also confirmed the strong potential of our high growth rising star brands and the Group’s leading position in emerging markets. LVMH has showed record revenue in 2007 and has once again improved profitability. In an economic environment unsettled since the beginning of the year, we will rely on the strength of our growth model, the exceptional innovation of our brands and the talent of our teams to make 2008 another year of growth.”
LVMH said it is "well positioned" for 2008 and will continue concentrating on internal growth and the development of its leading brands. The company set itself an "objective of a tangible growth" for 2008 based on "the geographical spread of its activities, the strength and the complementarity of its brands and the exceptional talent of its teams will enable the group to gain market share and to further strengthen its lead in the global luxury goods market."
