Luxury Goods Group LVMH Sees Profits Soar 49% in H1

LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury products group, reported profits soared 49 percent to 396 million euros ($482.6 million) in the first half of this year as financial expenses declined and sales jumped 8 percent to 5.68 billion euros ($6.92 billion).

The firm’s watches and jewelry division returned to profitability, reporting operating income of two million euros compared with a loss of 38 million euros ($46.31 million) a year earlier.

Operating income in the watches and jewelry division unit benefited from a continued reduction in costs, despite a high level of marketing investment, LVMH said.

Since the Basel watch fair in April, new models by TAG Heuer and Zenith have been marketed and other launches will take place in the second half of this year, including the Chiffre rouge line developed by Hedi Slimane for Dior, and Class One rings and Liens watches by Chaumet.

LVMH said operating income for the company as a whole rose 14 percent to 996 million euros ($1.21 billion).

In fashion and leather goods, Louis Vuitton posted a “remarkable performance”, with sales to Louis Vuitton’s clientele in Europe, Asia and the U.S. being particularly strong.

New products created by Marc Jacobs will be launched in the second half of this year while Louis Vuitton will be launched in South Africa and will continue its expansion in India and Russia.

“Sales during the summer have continued the strong trend we saw at the beginning of the year,” said Bernard Arnault, Chairman and CEO of LVMH. “A number of product launches in conjunction with the growth of our core brands in high-potential markets should allow LVMH to continue its progress in the second half of the year. All these elements allow us to confirm our objective of a significant increase in operating income in 2004.”