Luxury retailer LVMH has announced that its global sales for the first quarter were $9.8 billion and that the company’s revenues rose 4 percent in the last quarter.
Luxury Retailer LVMH Reports 4% Revenue Rise
LVMH, which owns over 60 luxury brands such as Bulgari for its elite watches, TAG Heuer, Kenzo and others, said its market in the US continues to be strong. The greater European market is also performing well except for France, which is experiencing a slump in tourists following terrorist attacks.
Following the terror attacks in Paris last November, the city has seen store sales fall by as much as 50 percent. Up to 10 percent of LVHM’s profits come from sales in France.
The cosmetics arm of the business witnessed the most significant increase in revenue in the three months leading up to March, at 9 percent, with the Christian Dior brand being a particularly high seller.
In spite the revenue rise, the results were slightly lower than what analysts had anticipated. According to a poll conducted by Reuters, analysts were expecting sales of more than €8.72 billion.
Luca Solca, an Exane BNP Paribas analyst said, ‘In general, this is not very surprising given that LVMH’s leather and fashion goods are so massive that they can be regarded as a reflection of the overall luxury goods sector and this sector is a bit on a slump.”
In China, the luxury goods company used to record double-digit growth in their sale due to the strong demand from the middle class. However, stiff competition is seeing a slow-down in demand for LVHM products.
At the same time, the Chinese government has imposed strong measures against luxury spending by government officials, contributing further to the declining demand for luxury goods.
As the world’s largest maker of luxury goods, LVHM has proven to be resilient in the face of dwindling demand. Even then, the lower than expected sales figures indicate that the company is not immune to the global slump in the luxury goods market.