The year 2010 proved the ability of the watch and jewelry brands belonging to LVMH to maintain a steady and organic growth, win a significant share in the market and greatly improve cost-efficiency, all of which demonstrated the effectiveness of the corporation’s strategy based on clearly defined priorities for each brand.
The significant results attained by the French House of LVMH were announced at their recent annual general meeting. For the past few months LVMH displayed an uninterrupted growth of its business.
In 2010, the company was smart to employ the situation in the luxury market, when economic recovery was just in the egg.
"Last year we took right decisions, quickly invest where it was needed and seized opportunities to increase our market share", Bernard Arnault, the company’s Chairman and CEO said at the meeting.
The biggest and perhaps the most important acquisition for the group was the controlling stake in Bulgari, the Italian jewelry company, despite the hefty price tag of $5.3 billion to be paid off over seven or eight years.
Today, the Bulgari brand is a pace-setting leader in the segment of jewelry and watches, which gathered different brands into one powerful team, including such famous trademarks as TAG Heuer, Chaumet, Zenith, Hublot, Fred and De Beers, which preserve their identity and singularity while moving forward.
Bernard Arnault said: “The alliance between my Group and the Bulgari Family is a perfect combination from all points of view as we share the same culture in terms of respect for identity and roots of the brands, quest for excellence, creativity and innovation. As is the case with LVMH, the Bulgari Family shareholders are directly involved in managing the company, they are entrepreneurs that know and excel in all aspects of the business, from the creation of the product to after sales service. It is for these reasons that we immediately understood each other and agreed on the way we would work together. I am certain that our partnership will be greatly beneficial to Bulgari as well as to the LVMH Group”.
The LVMH group noted the exceptional courage of the Japanese people after the devastating natural disasters and said it will donate 500 million yen for help assisting the crisis management committee. Although the Japanese market may not be their best performing market, but still it is an important one gaining 9% of LVMH’s total revenue. The group has 300 stores in Japan and a considerable staff of 4,500 employees.
LVMH achieved a rapid progress in Europe and the United States and is especially keen to expand its presence in Asia, particularly making a bigger and stronger push in the China market in the coming year.
In 2010, the French company earned a revenue of €20.320 million, up 19% year on year; in 2008 its revenue amounted to ?17.193 million and in 2009 it dropped to ?17.053 million.
The group’s profit in 2010 jumped by a staggering 73% to €3.073 million.
Watches and jewelry sales were noticeably higher reaching €879 million in 2008, ?764 million in 2009 and scored a hike of 29% in 2010 to ?985 million. Geographically, 25% of sales belong to Europe, 8% to France, 21% to Asia, 17% to the United States and 12% to Japan.
Pursuing its ambitions in the high-end jewelry market, Louis Vuitton plans to open a dedicated boutique and workshop of jewelry artisans in the Place Vendôme in Paris.
The LVMH Group has a simple outlook for 2011: confidence, innovation, motivation of teams and selective and promising investments, which no doubt include the possibility of a bigger stake in Hèrmes.
“The desire for excellence, the recognition of know-how and fine craftsmanship and the culture of authentic quality are enjoying significant growth throughout the world. This trend will remain prominent in the years ahead, opening up for us magnificent perspectives for the future”, Bernard Arnault stressed.
Veronica Novoselova, Rough&Polished, from Italy
