It seems to be the roaring ‘20s – or at least 2021 – for Louis Vuitton Moet Hennessey (LVMH), the parent company of Louis Vuitton, Dior, and so many more. Consumers are buying luxury fashion items… despite (or perhaps due to) the effects of the global pandemic. And, that’s probably no surprise to anyone trying to secure the latest and greatest Louis Vuitton and Dior fashion items. In fact, the sales from the Fashion and Leather Goods segment of LVMH likely kept LVMH as a whole in the black.
Although LVMH’s 2021 first half year revenues were positive – up 11% over the same time period of 2019 – the real stars are in the Fashion and Leather Goods segment. Fashion and Leather Goods revenues skyrocketed 38% when compared to the same time period in 2019. In absolute dollars, the revenues were $16.37 billion for the first half and $8.42 billion for the second quarter of 2021. Needless to say, the numbers are substantially greater when compared to 2020, during the height of the pandemic, but also less meaningful.
The real story, though, is the success of the Fashion and Leather Goods group. According to LVMH, although a number of brands did well, its “largest brands” Louis Vuitton and Dior particularly excelled. The LVMH report does not breakdown numbers by brand, however, the text described successes.
Regarding Louis Vuitton, the report calls its performance “remarkable” and “driven by its creative momentum and its quest for excellence in craftsmanship.” Three of its classic bags were reimagined and the focus of marketing campaigns. Also, important were the digital initiatives and collaborations, as, for example, the one with the NBA. Additionally, Louis Vuitton re-opened the heralded La Samaritaine store in Paris and the boutique in Tokyo’s Ginzu district.
As for Dior, LVMH says it “recorded an excellent half-year with remarkable growth in all its product categories with local customer bases.” It also highlighted the launch of the Dior Caro bag and the reimagination of several of its classic bags.
Geographically, for all groups, Asia (excluding Japan) and the United States were the strongest… by a lot. Likely reflecting the reopening of stores and vaccination campaigns, revenues in Asia rose 30% over the first half of 2019, and the United States increased 23%. The Asia region and the United States also accounted for the largest percentages of overall revenue, 38% and 25%, respectively. On the other hand, revenues in Europe and Japan both declined, 16% and 3%, respectively.
In case you’re wondering whether LVMH’s acquisition of Tiffany & Co. was worth it, well… LVMH seems pleased with the results. It says Tiffany “achieved an excellent half-year, driven by particularly strong momentum in Asia and the United States” as well as generating interest with a younger consumer.
What would you like to see in the Louis Vuitton and Dior future? Of course, the multi-billion dollar question is whether and to what extent LVMH can continue to grow. Its recent business strategy has included multiple acquisitions, including Tiffany and, most recently, designer Virgil Abloh’s Off White brand. It also inked a deal for a brand by Phoebe Philo, formerly of its Celine label. However, other than Tiffany, these fashion labels are small and represent little of the company’s financial success.
On its face, it appears LVMH is counting on Louis Vuitton and Dior continuing to rise. Although the report gives little detail as to the handbags of the future, it does look to –
“exceptional expertise, intensely creative collections and an excellent customer experience.” It also plans to focus on “an ever more sustainable and responsible vision of luxury.”
So, is this a case of “don’t fix what’s not broken”? Or keeping surprises quiet for now?