LVMH performance up on strong brands and market recovery

By Katie Bird

- Last updated on GMT

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A recovery in Europe and the US, as well as good growth in Asia, is behind a sales and profit increase for luxury goods provider LMVH.

The France-based company reported a global sales increase of 16 per cent (14 per cent organic) for the second half of 2010 when compared to 2009’s figures, with a total sales figure of €9.1bn for the period.

Perfumes and cosmetics, which includes brands such as Kenzo, Christian Dior and Guerlain, recorded sales of €1.4bn for the first half, up 12 per cent on last year’s figures.

According to the company, good sales in the sector were influenced by strong growth for the brands in the Asian markets, and a return to demand in Europe and the US.

Christian Dior was highlighted as a brand that has gained significant market share during the period with both its fragrance and makeup products.

J’Adore, Miss Dior Chérie and Eau Sauvage all achieved growth the fragrance side, and the new foundation Diorsin Nude was noted as a successful launch.

Makeup brand Benefit saw the first store opening in China during the period, and Make Up For Ever, also saw strong growth, according to the company.

Profits up driven by cost saving

Profits in the sector were also up on last year (profit from recurring operations stood at €181m compared to €121m in 2009), which the company puts down to good sales, but also successful cost saving activities implemented across the group.

While the outlook for the near future is good, company CEO Bernard Arnault said these cost saving measures will not be relaxed in the second half of the year ‘despite the momentum in the markets’.

The Christian Dior brand will continue to be a focus during the second half of 2010, as the roll out of Rouge Dior lipstick and Eau Sauvage will continue.

High hopes are also pinned on a new feminine version of Play at Parfums Givenchy, as well as new fragrance launches and further growth for the Fendi and Pucci brands.

Overall the company is confident of future performance, stating that it will gain market share in the luxury sector by targeted geographic expansion, innovation and creativity as well as pursuing rigorous cost management programmes.

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