The luxury market is still going strong according to LVMH!
Bulgari recorded strong sales in 2014 while the watch brands owned by LVMH struggled due to “cautious purchasing” among retailers, the luxury goods conglomerate reported this week.
LVMH, Moët Hennessy Louis Vuitton S.A., recorded organic growth of 4 percent in its Watches & Jewelry division in 2014 and though profit was recurring, operations were down 23 percent.
“While jewelry revenue showed remarkable momentum, watches were penalized by the cautious purchasing behavior of multi-brand retailers in an uncertain economic environment,” LVMH said.
In addition to Bulgari, LVMH owns Chaumet, Fred, TAG Heuer, Hublot and Zenith and operates De Beers’ retail stores in a joint venture along with the diamond miner and marketer.
The company said Bulgari’s iconic lines did well in 2014.
LVMH also noted the changes at TAG Heuer. The brand’s CEO resigned in December and it’s trying to attract younger buyers with lower-priced watches and the use of popular model Kara Delevingne in its newest ad campaign.
As a whole, LVMH recorded sales of $34.9 billion in 2014, organic revenue growth of 5 percent year-over-year. Organic revenue growth was 5 percent in the fourth quarter.
Group share of net profit jumped from $3.93 to $6.45 billion. The company’s operating margin was 19 percent.
LVMH said sales were strong in the United States and across all business groups except Wines & Spirits, which was impacted by the destocking of distributors in China.
Commenting on the results, Chairman and CEO Bernard Arnault said, “The 2014 results confirm the capacity for LVMH to progress despite economic and currency uncertainty. Revenue and net profit reached new record levels … 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.”