Louis Vuitton Moet Hennessy says Asia, the Middle East and North America delivered excellent performance for its Sephora, DFS business arm in 2014.
The world’s largest luxury goods retailer and manufacturer said the business, in its books referred to as its Selective Retailing division, achieved record annual growth revenue of eight per cent.
Profit from the division’s recurring operations reached €882 million in 2014.
“Sephora had an exceptional year and continued to gain market share. Performance was excellent especially in North America, the Middle East and Asia. Online sales grew significantly, supported by innovative mobile features,” the company said in its full year announcement.
“The store network expansion continued: the company established a new presence in Indonesia and Australia while several flagship stores, such as the Champs-Elysées and Dubai Mall, have been renovated. New brands enhanced the product offering, bringing a diversity that never ceases to keep Sephora ahead in beauty innovation.”
LVMH said that “faced with a complex situation in Asia, particularly relating to currency and geopolitical developments,” its airport retailing business DFS continued to focus on optimising its offer and deploying its loyalty program.
“Its profitability was equally impacted by the expansion and renovation of several airport concessions.”
Despite subdued economies in China, Hong Kong and much of Europe, LVMH achieved a revenue of €30.6 billion in 2014, an increase of six per cent over the previous year. Organic revenue growth was five per cent.
“Revenue in all business groups increased with the exception of Wines & Spirits which continued to be affected by the destocking of distributors in China.”
The group maintained strong momentum in the US, while Europe demonstrated good resilience despite the economic environment. Asian countries, it said, displayed mixed trends.
In the fourth quarter, revenue increased by 10 per cent compared to the same period of 2013, with organic growth five per cent.
Profit from recurring operations reached €5 715 million, resulting in an operating margin of 19 per cent.
Chairman and CEO Bernard Arnault said the 2014 results confirm the capacity for LVMH to progress despite economic and currency uncertainty.
He said the company’s achievement reflected a commitment to excellence, a passion for quality and a capacity to innovate.
“In 2014, all our Maisons demonstrated outstanding flexibility. By adapting their strategies to global changes and by continuing to evolve, they have shown the creativity and entrepreneurship that drive them forward. In an uncertain economic environment, we can rely on the desirability of our brands and the agility of our teams to further strengthen our leadership in the world of high quality products,” Arnault said.
* Louis Vuitton’s Singapore Maison flagship at Marina Bay.
The luxury retailer said that despite a climate of economic, currency and geopolitical uncertainties, LVMH is well-equipped to continue its growth momentum across all business groups in 2015.
“The group will maintain a strategy focused on developing its brands by continuing to build on strong innovation and a constant quest for quality in their products and their distribution.
“Driven by the agility of its teams, the balance of its different businesses and geographic diversity, LVMH enters 2015 with confidence and has, once again, set an objective of increasing its global leadership position in luxury goods,” the company statement concluded.