A Louis Vuitton logo is seen outside a store on the Champs-Elysees in Paris, France, September 18, 2020. REUTERS Charles Platiau File Photo
PARIS, Jan 27, Reuters -- The world's largest luxury goods conglomerate LVMH LVMH.PA sees a surge in demand for its fashion, handbags and jewellery in 2022 after shoppers snapped up high-end wares over the holiday season.
On Thursday, the French group's biggest earners, Louis Vuitton and Dior, said the fourth-quarter sales growth accelerated, reaching 20.04 billion euro $22.34 billion, with growth from the French group's biggest earners, including Hennessy cognac and Sephora.
The luxury labels led to a 28% increase in sales of LVMH's largest division, fashion and leather goods, on a like-for-like basis, beating analyst expectations for 16% growth. The last three months of last year, revenues for business came in 51% above their pre-pandemic level, the group said.
The specialised distribution division, which includes Sephora, saw a 30% increase in revenue over the quarter, as consumers flocked to stores for holiday purchases at the end of the year.
Expectations were high going into the results after reporting from competitors like Burberry, Prada and Richemont earlier in the month. Christopher Rossbach, the manager of the World Stars Global Equity Fund and CIO of J. Stern Co., said that the results report did not disappoint even on the elevated expectations.
LVMH singled out the United States as its best performing country for sales, accounting for 26% of the total in 2021, which will add to the group's strengths this year, especially since it bought jeweller Tiffany.
The integration of Tiffany and Louis Vuitton is a positive in the minds of the U.S., according to HSBC, due to the weight of Louis Vuitton and Sephora.
In January, LVMH billionaire boss Bernard Arnault said that strong momentum for the group continued, adding that LVMH could increase prices to protect margins in the current inflationary environment.
He said that Tiffany, whose acquisition was completed a year ago, posted a record year in terms of sales and profit, even though its main flagship store in New York was closed for renovation throughout 2021. It is due to be reopened this year.
After months of lock-downs and store closures, the luxury industry rebounded strongly after the coronaviruses crisis.
LVMH has tapped into this appetite for high end goods, and gained ground on rivals with active marketing campaigns targeting local consumers rather than relying on deep pocketed tourists. The market share of fashion and leather goods increased to around 21% compared to 16% before the epidemic, according to UBS forecasts.