LVMH Posts Gain Despite Drop for Watches, Jewelry

LVMH, one of the world’s leading luxury products groups, enjoyed a 10% gain in sales over last year’s figures for the nine months ending Sept. 30. The group’s sales grew to 8.6 billion Euros ($7.8 billion). However, sales of its watches and jewelry dropped 9% in that same period compared with last year’s figures, from 427 million Euros ($386.5 million) to 389 million Euros ($349.5 million).

“The evolution of sales in the watch and jewelry business group reflects the consequences of terminating certain manufacturing licenses that did not conform with the strategy chosen by LVMH for this sector,” says the corporate statement. “In this context, Ebel, Zenith, Christian Dior watches, and Chaumet continued to grow in September and see the benefits of their new strategies and innovative marketing campaigns.”

Sales also were down in wine and spirits (-2%), but the other divisions posted gains: fashion and leather (+16%), perfumes and cosmetics (+12%), and selective retailing (+13%).

LVMH’s overall sales for all divisions in third quarter 2001—which the LVMH report called “a particularly difficult political and economic environment”—rose just 4% compared with last year’s figures, to 2.9 billion Euros (almost $2.7 billion). Last year, the gain was 38%. “Following a dynamic start to the quarter, the tragic events which struck the U.S. [on Sept. 11] have had an impact on some of our activities,” the report noted. Overall sales for September alone fell 8% compared with the previous year’s figures. Sales for TAG Heuer and Fred fell in September, “suffering from the repercussions of the international economic climate.”

The company says it still aims to double its sales and operating profit over the next five years.