The firm’s flagship fashion and leather goods division, which includes the Louis Vuitton, Fendi and Celine brands, saw like-for-like sales rise 4 per cent in the period to €7.1bn (£6bn), down from 5 per cent growth in the first half and well behind analyst forecasts of up to 10 per cent. Shares in the company fell 6 per cent as investors reacted to the unexpectedly poor performance.
Overall, revenues for the first nine months of the year rose 8 per cent to hit €20.7bn in the first nine months. LVMH, which also includes brands such as Tag Heuer watches, Hennessy cognac, Moet champagne and Guerlain perfume, says its “wines and spirits” and “watches and jewellery” divisions saw a sales rise, while champagne and cognac also increased. Its Sephora and duty free retail shops remain the bright spot, with like-for-like up 19 per cent.
Global demand for luxury goods is wavering and so companies such as LVMH are looking to new ways to boost growth. LVMH is focusing on making its products even more exclusive, launching products with fewer logos and more precious metals in a bid to appeal to the wealthiest shoppers while driving up prices and improving profits margins
It is also shaking up its management. The firm’s chief executive, Bernard Arnault, promoted his daughter Delphine Arnault from managing director at Dior to executive vice-president at LVMH earlier this year. It has also appointed Darren Spaziani, formerly accessories director at Proenza Schouler, to design new “very high-end” leather goods.
Earlier this month, the firm announced that chief creative officer Marc Jacobs would leave his role as artistic director to create his own label. While no replacement has been announced, rumours suggest Nicolas Ghesquiere, previously Balenciaga’s creative director, will take on the job.