Money Is Still No Object for LVMH's Free-Spending CustomersBy
Louis Vuitton is getting both richer and more expensive. When the stock market is strong, that’s often the handsome way things unfold for a blue-chip luxury house.
LVMH said sales increased 4 percent, to €7.2 billion ($10 billion), in the first quarter, in part because it raised prices on some of its most precious products. For example, chichi shoppers snapped up its monogrammed leather bags, a custom service that adds a buyer’s initials next to the trademark LV pattern. LVMH had raised prices 3 percent on all its Louis Vuitton products in mid-February. That’s an extra $120 on a $4,000 briefcase and a nice little cushion for a company that already pockets 21¢ per sales dollar.
The company’s acquisition of Loro Piana also paid off as customers flocked to the textile maker’s ultrafine threads (think $5,000 cashmere baby hoodies lined with rabbit fur). Last summer, LVMH paid $2.6 billion for an 80 percent stake in the storied textile company, which specializes in rare materials such as the wool of Peruvian alpacas and the fibers of Myanmar lotuses.
All told, the company’s fashion-and-leather-goods business posted a 9 percent increase in sales, after stripping out exchange-rate effects and results at newly opened stores. LVMH’s champagne sold well, as did its Sephora makeup. One of the only dark spots was cognac, which took a hit in part because Chinese customers soured on the drink a bit.
Here’s a look at how sales broke down by category: