The world’s largest luxury goods group is going from strength to strength. A 20 percent increase to €22.2 or €18.4 billion for the revenues of its Leathergoods and Fashion division, which includes market stars like Louis Vuitton and Christian Dior, helped LVMH to post an overall sales increase of 15 percent to a new record of €53.7 billion in 2019. On an organic basis, the group’s sales went up by 10 percent.
Earnings from continuing operations also grew by 15 percent from the already high level of 2018, reaching €11.5 billion or 21.4 percent of sales. Net earnings grew by 13 percent to €7.2 billion.
“The desirability of our brands, the creativity and quality of our products, the unique experience offered to our customers, and the talent and the commitment of our teams are the group’s strengths and have, once again, made the difference,” said the group’s wealthy chief executive and major shareholder, Bernard Arnault.
Organically, the Fashion & Leathergoods division posted a sales increase of 17 percent for the year, and its operating profit went up by 24 percent to €5.94 billion. The company said that Louis Vuitton continued to deliver “an exceptional performance” and Christian Dior had had “a remarkable year.” It noted the “strong growth” of Loewe and the “good progress” of Loro Piana, Rimowa and Berluti.
Blaming mainly the social unrest in Hong Kong, LVMH reported a sales increase of only 12 percent for the fourth quarter of last year, with an organic increase of 8 percent. The Fashion & Leathergoods division’s organic growth slowed down to 15 percent in the quarter.
Looking at 2020, Arnault expressed confidence in the continued profitability of the group, but he warned of the possibility of a financial crisis at some point in the future as interest rates are close to zero percent.
