Following yesterday’s release of LVMH’s figures for the six months ending 30 June 2023; Pippa Stephens, senior apparel analyst at GlobalData, a leading data and analytics company, offers her view: “LMVH’s exceptional growth has continued, with reported group revenue for H1 FY2023 rising by 15.0% to €42.2bn, as its products remain highly desirable despite ongoing economic difficulties. Though Q2 experienced a slight slowdown, with revenue rising by 13.2% compared to 16.8% in Q1, this performance is still impressive, especially considering its main competitor Kering’s drastic deceleration and the recent administration of independent labels like Julien Macdonald and Christopher Kane – ¬a testament to LVMH’s solid brand identities and unwavering relevance among young consumers. Though luxury shoppers are more protected from inflationary pressures due to higher discretionary incomes, many have still started cutting back on spending due to higher costs, posing the question of whether LVMH’s growth trajectory will continue in the long term.
“Japan recorded the strongest performance for LVMH, with organic growth of 31%, followed by the rest of Asia at 23%, as the relaxation of travel restrictions at the end of 2022 drove demand from both locals and international tourists. Europe was close behind, rising by 22%, also aided by the return of tourists, who took advantage of favourable exchange rates. The group announced earlier in the week that it will be a premium partner of the Paris 2024 Olympic and Paralympic games, with its jewellery brand Chaumet designing the medals and Moët Hennessey providing drinks for the hospitality programmes. This bodes well for its performance in Europe next year, as it will significantly boost visibility and awareness of its offering. The US was LVMH’s weakest region by far, with organic revenue rising by only 3%, partially due to local consumers buying items abroad, but also due to mounting economic problems and a step back from spending after two strong years boosted by government stimulus payments.
“The group’s Selective Retailing division, which includes Sephora and DFS airport stores, significantly outperformed, with reported revenue growing by 26.0%. Sephora performed particularly well, driven by both its superior brand offering and its expansion into new regions, with its new store in Westfield London stated to have been a huge success. LVMH’s largest division, Fashion & Leather Goods, also achieved strong growth of 16.7%, with Louis Vuitton one of its star performers. The brand’s new menswear creative director, Pharrell Williams, showcased his first collection at Paris Fashion Week in June, with the star-studded event receiving an extremely positive reception, supporting its long-term outlook. Christian Dior, Celine and Loewe were also reported to have done outstandingly, with their superior craftmanship and classic styles meaning that consumers continue to be willing to invest.”
