Turning a blind eye to recession: Louis Vuitton-Moet Hennessy

Buoyed by continued spending from the world’s elite, luxury goods company Louis Vuitton-Moet Hennessy isn’t feeling the effects of the economic crisis just yet, continuing its growth across 2008.

The conglomerate posted revenue of €11.96 billion ($NZ27 billion), over the first three quarters of 2008, up 4.3% on 2007.

Good growth came from all categories, excluding, surprisingly the wine and spirits segment.

The liquor industry has been generally pretty resilient through the downturn, so these figures show that while customers are prepared to drop serious money on handbags, they are scaling back on high-end Hennessy cognac and Dom Perignon Champagne.

The company has shown strong growth in the emerging markets of China, India and Russia, in line with expectations, but sales remain flat in the first world markets.

The biggest boost came from the watches and jewellery category, which was up by 11% to €656 million, pushed by Hublot watches and De Beers diamonds which saw strong growth in all regions. Zenith watches saw particularly high growth in the Middle East.

Other categories seeing boosts including fashion and leather goods, perfumes and cosmetics, and selective retailing, which were up 5%, 6% and 5% respectively.

Louis Vuitton fashion and leather goods saw double-digit revenue growth through this period, pushed by the new Damier Graphite collection and showing that the brand is still pulling despite problems with counterfeiting over the past few years, particularly in China.

Fendi, Donna Karan, Marc Jacobs and Givenchy all showed “good progress,” according to the third quarter revenue report.

Perfumes were boosted by the launch of Christian Dior’s new Dior Homme Sport for men, as well as Guerlain Homme and Givenchy’s Phenomen’Eyes mascara, all of which have performed well.

As a rule, the luxury market is generally considered by analysts to exist ‘beside’ the conventional retail market, simply because the consumers of these high-end goods are generally wealthy, and unaffected by market conditions as a whole.

Subsidiary Sephora acquired 45% of the high end Russian perfumery chain “Ile de Beauté” earlier this month, although the effects of this purchase will not be felt until next year.

The company will see a sales boost at Christmas, and is optimistic about the last quarter and 2009.

“LVMH confirms its objective of a tangible increase in its results in 2008.”

LMVH was formed out of the merger of champagne producer Moet et Chandon and cognac producer Moet Hennessy, which then merged with Louis-Vuitton in 1987 to form today’s luxury super-conglomerate.

LMVH is the parent of over 60 sub-companies, comprising of some of the world’s most iconic luxury brands, showing sales growth year on year since 2003.