Cosmetic and fragrance sales boost LVMH
supported by a strong performance from the company's cosmetics and
fragrance operations, boosted by the Dior brand as well as an
increasing market share for its Sephora retail arm.
The company said it achieved total sales of €13.91bn, up 11 per cent on the figures for 2004, while net profit was up 21 per cent to reach €1.44bn, representing another strong year for the company.
LVMH CEO Bernard Arnault described 2005 as being a year in which the company had strengthened its position as a global leader of French and European luxury goods.
"The financial performance of the group in 2005 shows the effectiveness of a development strategy based on an exceptional portfolio of brands and on the complementary nature and successful geographic balance of its activities," Arnault said.
On the cosmetics and fragrance front, the company reported that sales grew 15 per cent to reach €173m, up from €150m.
The company said that Parfums Christian Dior increased its market share, particularly in Europe and Asia, while the Miss Dior Cherie and Dior Homme fragrance launches also met with market success.
Likewise, the company reported an 'excellent' performance from the Dior make-up and skin care ranges, which helped to strengthen the brand's image. The Guerlain range was particularly strong in the skin care and make-up segment, where KissKiss lipstick was a worldwide success.
However the biggest growth came from the company's selective retail division, which was primarily boosted by the addition of the Sephora perfume and cosmetics retail business.
The selective retailing business grew an impressive 46 per cent in 2005, to reach a sales turnover of €347m.
The company said that the retail arm had grown significantly in Europe and the US during the course of 2005 and that its profitability increased sharply, mainly as a result of growth in European market share.
The company added that Sephora's entry on to the China market was noteworthy, particularly in view of the huge growth in cosmetic and toiletry sales in that market at present.
Looking ahead to the rest of 2006, the company believes it is well positioned to continue driving ahead with further sales growth, and believes that it will be another year of double-digit revenue growth.