LVMH’s watches and jewelry business group benefited from sustained demand across all regions during the first half of 2011. Reported sales rose 30 percent to 576 million euros ($831 million). Organic revenue, when currency fluctuations and other nonrecurring events are removed, grew by 27 percent. It was the Paris-based luxury conglomerate’s top performer in terms of sales growth among its six business divisions.
Profit from recurring operations for the business group rose by a staggering 73 percent to 85 million euros ($122.6 million) for the first half of 2011.
By region, watch and jewelry sales for the period increased 52 percent in Asia, 29 percent in Europe, 28 percent in the U.S. and 8 percent in Japan. This business group is made up of Swiss luxury watch brands, Tag Heuer, Zenith and Hublot; Parisian timepiece and pen designer, Dior Montres; Parisian luxury jewelry houses FRED, Chaumet; and De Beers Jewellery (the diamond jewelry retail arm of the mining giant, which operates in a joint agreement with LVMH).
LVMH said TAG Heuer revenue grew significantly due to its automatic chronograph made with the 1887 caliber movement, a new women’s range of the Formula 1 line of timepieces, and the selective opening of TAG Heuer stores. At Hublot, the latest models from the King Power line were delivered with new Unico movements made by its manufacture. Zenith confirmed the strong demand of its new collections. Dior launched with “extraordinary success” the Dior VIII watch. Chaumet, FRED and De Beers all achieved good performances in their own store networks.
The watches and jewelry division makes up about 5.6 percent of LVMH’s total sales, but that is about to change soon as it absorbs Bulgari into its company. LVMH bought a 76.1 percent controlling stake in the Italian jewelry house in March and it is in the process of finalizing the transaction.
LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, divides its business into the following groups: Wine & Spirits, Fashion & Leather Goods, Perfume & Cosmetics, Watches & Jewelry, Selective Retailing and Other Activities. It’s brands from its divisions (other than jewelry and watches) include Moët & Chandon, Louis Vuitton, Guerlain, Sephora and Groupe Les Echos media group.
LVMH’s total revenue for the first half of 2010 was 10.3 billion euros ($14.8 billion), an increase of 13 percent. Organic revenue growth was 15 percent. All business groups contributed to this performance, “which is even more remarkable coming on top of the strong growth in the first half of 2010,” the company said. Sustained growth was reported in the U.S., Europe and Asia, despite the uncertain economic conditions.
Profit from recurring operations for the period, ended June 30, rose to 2.2 billion euros ($3.2 billion), an increase of 22 percent compared to the same period in 2010. Current operating margin reached 22 percent, an improvement on the first half of 2010. Group share of net profit increased 25 percent to 1 3 billion euros ($1.8 billion).
“LVMH’s excellent performance in the first half, once again, demonstrates the exceptional appeal of our brands, the attraction of our high quality artisanal products and the pertinence of our strategy,” said Bernard Arnault, LVMH chairman and CEO. “We approach the second half of the year with confidence and are relying upon the creativity and quality of our products as well as the effectiveness of our teams to pursue further market share gains in our historical markets as well as in high potential emerging markets.”