LVMH reports slight drop in 2004 watch and jewelry sales due to exchange rates

LVMH’s Moët Hennessy Louis Vuitton, Watches and Jewelry division reported a 1% decline for 2004, as a result of the continued weakening of the U.S. dollar and the Japanese Yen, the world’s largest luxury products group said Wednesday. Not factoring exchange rates, the unit’s “organic” sales increase was 18% and all watch and jewelry brands experienced growth for the year.

Watches and Jewelry sales in 2004 was $647.9 million compared with $654.4 million in 2003, the company said.

“TAG Heuer had an exceptional year, confirming its status as a star brand,” the company said. “The most recent innovations have met with great success, notably the Formula 1 and Carrera watches by TAG Heuer, the new ladies’ watch Open Star by Zenith, and the Chiffre Rouge watch developed by Hedi Slimane for Christian Dior, as well as the Class One rings by Chaumet.”

Overall, LVMH reported record sales of $16.4 billion in 2004, a 6% growth over sales of $15.6 billion in 2003. Not factoring in exchange rates, growth was 11%.

In December, LVMH said it posted record sales with an exceptionally strong year-end, most notably at Louis Vuitton.

“The Group’s performance is even more remarkable considering that it was achieved in a very difficult exchange rate environment in which both the dollar and the yen continued to weaken against the Euro,” the company said.

Sales in LVMH’s other divisions are as follows:

* Wines & Spirits, $3 billion, 8% reported increase and 11% organic increase;

* Fashion & Leather Goods, $5.7 billion, 5% reported increase and 10% organic increase;

* Perfumes & Cosmetics, $2.8 billion, 1% reported decline and 4% organic increase;

* Selective Retailing, $4.4 billion, 11% reported increase and 17% organic increase.

In its 2005 outlook, the company said that the “economic and exchange rate environment is likely to remain challenging.” However, it added that “LVMH will continue to pursue its long-term growth strategy based on creativity and product quality. The Group will continue to focus on its star brands and to improve profitability.”