LVMH Sales Jump 24%

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
#1
Now, what is LVMH??

Go ask your female buddies, girlfriends or wives and you will receive a unanimous roar of reply "ITS LOUIS VUTTON YOU DUMBWIT!" Big Grin

So, why do i post this article below?

Simple. When would one buy more LVs? When the recession is looming around the corner or when the economies is picking up.

LVs, Guccis, Coach, Pradas and etc etc are luxury goods. They are an important indicators of the economy well-being ahead of us.

I wouldn't dare to say the indicators forecast further than 12 months down the road though. Anything can change, recall 97 Asian currencies crisis.

Still, this article is a piece of good news to all the investors and traders (long) out there.

And oh.. the article is saying LV and other luxury goods are gonna raise their prices soon.

So if you guys are going to get your beloved that bag she has been eyeing for last Christmas, go get it now before even the appreciation of Sing dollar cannot compensate for the price increase. Cool


http://online.wsj.com/article/SB10001424..._whatsNews

PARIS, French luxury-goods company LVMH Moet Hennessy Louis Vuitton reported a 24% jump in third-quarter sales, confirming a strong rebound for luxury products from champagne to high-end watches.

Sales at the world's largest luxury company rose to ~5.11 billion ($7.13 bilion) from ~4.14 billion in the year-earlier quarter. All divisions posted double-digit growth.

For the rest of the year, "we should be balancing optimism and caution," LVMH Finance Director Jean Jacques Guiony said in a conference call. He said the restocking by retailers that boosted LVMH's performance earlier this year had ended but the company was still performing well, which was cause for optimism. He warned, however, of less favorable currency rates and tougher quarterly comparisons to come, particularly in the U.S.

The fashion and leather goods division, home to luggage maker Louis Vuitton, which was one of the industry's top performers throughout the crisis, continued its brisk pace of growth, up 26% to ~1.95 billion. The company raised prices of its Louis Vuitton products by an average of 9% in Europe in recent weeks, the first time it has implemented price increases since the crisis. Sales of those products have exceeded LVMH expectations, and capacity constraints have prompted the company to temporarily shorten hours of some stores in France.

Overall, LVMH said its performance so far this year "confirmed its confidence for 2010," as it enters the all important end-of-year period, which accounts for a large proportion of annual sales.

At the selective retailing unit, which owns DFS duty free shops in airports and the Sephora cosmetics chain, rose 24%, and the company said Asian tourism is on the rise. That's a positive sign for the sector as a whole, which generates a lot of business from travelers shopping abroad.

The wine and spirits division, closely watched this quarter for signs of improved consumer demand, posted a 24% rise in sales to ~846 million. The division, which sells Veuve Clicquot champagne, suffered during the financial crisis but recently rebounded sharply as retailers began restocking their stores and consumer demand returned.

Watches and jewelry, another area that suffered from destocking by retailers, also improved, with sales rising 31% to ~244 million.

LVMH expressed interest in expanding in "the most promising markets." Luxury companies are scrambling to expand in Asia, especially China, as the country's growth gives rise to a new wave of consumers seeking high-end goods.

Luxury goods companies have been particularly cautious in calling a return to growth in the sector after the economic crisis abruptly ended years of fast growth. But LVMH is the second luxury goods company this week to sound an upbeat note about the sector's recovery.

U.K. fashion retailer Burberry Group PLC Wednesday increased its full-year guidance for wholesale revenue in the second half after sales of watches and perfumes beat the company's projections.

Write to Mimosa Spencer at mimosa.spencer@dowjones.com




Reply
#2
I think for luxury goods wise, there's always a niche market for it as it caters to the rich or ultra-rich, who may be totally unaffected by recessions and crises. Of course, one may argue that the recent crisis was the worst in 70 years (or so the papers keep preaching), therefore the number of rich would have dwindled.

Apparently, though, the strong rebound in the stock markets and economy have also minted many "Nouveau Rich" (New Rich) who are very eager to spend their newfound wealth on such luxury goods, in order to live the high life and of course to show the world that they are successful. Hence, perhaps this is why luxury brands can afford to raise prices (part of the reason is also to keep up with inflation, which most businesses are able to do by increasing prices over time) without hurting sales volume or their contribution margins.

I would think a brand like LV would continue to cater to image-conscious young ladies, who have strong earning power and who like to look visible carrying a luxury brand. Therefore, sales are unlikely to dip very much; in fact it will probably continue growing as the middle income segment of most Asian countries is growing!
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#3
You are right on the new rich MW.

What struck me was the statement that LV is increasing the prices for the first time since the crisis struck. I am sure they have done their due diligence that the demand is strong out there.

And to grumble abit.. What's so good about LV and those Atas goods anyway!? I still dun get it why girls go so crazy over them?! Hiaz..

Reply
#4
Quote:What's so good about LV and those Atas goods anyway!?.

LV has a good brand due to their consistient and recognizable design over the years, as well as the fact that they never drop prices for year end sale (unlike another brand...I think it was gucchi). At least, thats what my wife says... I have learnt alot about LV since getting married Confused

Wonder LVMH is worth keeping on the radar?
I wait until there is money lying in the corner, and all I have to do is go over there and pick it up.
Jim Rogers
Reply
#5
(17-10-2010, 08:14 AM)BlackCat Wrote: LV has a good brand due to their consistient and recognizable design over the years, as well as the fact that they never drop prices for year end sale (unlike another brand...I think it was gucchi). At least, thats what my wife says... I have learnt alot about LV since getting married Confused

Wonder LVMH is worth keeping on the radar?

LV and other such brands (like Miu Miu) have a "prestige" factor associated with them. Some are a little more blunt and call it the "snob" factor, haha! Tongue

Lucky for me, my wife has no interest in such bags. She gets her generic ones from the nearest available discount shop.....
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#6
(17-10-2010, 09:42 AM)Musicwhiz Wrote:
(17-10-2010, 08:14 AM)BlackCat Wrote: LV has a good brand due to their consistient and recognizable design over the years, as well as the fact that they never drop prices for year end sale (unlike another brand...I think it was gucchi). At least, thats what my wife says... I have learnt alot about LV since getting married Confused

Wonder LVMH is worth keeping on the radar?

LV and other such brands (like Miu Miu) have a "prestige" factor associated with them. Some are a little more blunt and call it the "snob" factor, haha! Tongue

Lucky for me, my wife has no interest in such bags. She gets her generic ones from the nearest available discount shop.....

Just joking, you applied your value-investment in choosing your the-other-half also? :p

Reply
#7
(17-10-2010, 12:43 PM)valuestalker Wrote: Just joking, you applied your value-investment in choosing your the-other-half also? :p

Yes! Tongue
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#8
(17-10-2010, 09:01 PM)Musicwhiz Wrote:
(17-10-2010, 12:43 PM)valuestalker Wrote: Just joking, you applied your value-investment in choosing your the-other-half also? :p

Yes! Tongue


You better hope your wifey never bother to look through this post else we will all pray for your salvation.. Angel

Big Grin

Reply
#9
(17-10-2010, 09:01 PM)Musicwhiz Wrote:
(17-10-2010, 12:43 PM)valuestalker Wrote: Just joking, you applied your value-investment in choosing your the-other-half also? :p

Yes! Tongue

For MW, I don't think it's so much a joke right?

I figure that choosing a better half with the same values makes things a lot easier too. At the very least, you can avoid many quarrels regarding households finances. On the plus side, there's an extra surplus (if Spouse is working) to compound investments quicker.

Personally, I made the same choice. Going to see how it pans out. Smile
Reply
#10
Kazikurai is quite spot-on! It's not so much of a joke as one might view it to be, because the choice of a spouse which is undertaken from the "value" perspective really does contribute significantly to your long-term wealth (and health, I should say!).

When there is alignment of monetary goals between spouses, there exists a climate where savings and investment choices can be made free of squabbling and disagreements, which enhances the marriage experience. Also, there has to be inherent and implicit trust between husband and wife in the managing of monies. These all contribute (but do not guarantee) a happy and successful marriage.

Sadly, the key and number one reason why marriages fall apart is due to money issues. It is difficult for a marriage to work if one is a saver while the other is a profligate spender; or if one loves branded goods while the other buys bargain items from the nearest wet market. These examples may sound extreme, but they illustrate how one should go about choosing a spouse which aligns to their own monetary beliefs and lifestyle. Smile
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)