Louis Vuitton and Dior take off, but leather goods do even better and, together, they sound LVMH’s charge during the 4th quarter of 2020. The numbers are clear: revenue for the Fashion & Leathergoods division increased by 18% (at constant rates) during the 4th quarter of 2020, compared to the same period of the previous year. In doing so, LVMH managed to limit the damages caused by the pandemic and close 2020 with revenue down 17%. The margins, on the other hand, dropped by 28%. “Cautious hope” for 2021.
Vuitton, Dior and leather goods sound the charge
Fashion & Leathergoods acted as a parachute for LVMH. As a matter of fact, the French luxury conglomerate has closed the 4th quarter of 2020 with 14.3 billion euro in sales, down 3% at constant rates, and in line with analysts’ expectations. An improved performance, from the that of the first 9 months of 2020.
During the October-December period, sales of fashion and leather goods increased by 18% compared to 2019 and by 12% on the quarter. The bounce, says the company, can be attributed to the strong recovery that took place in China from April on and in the USA from July.
Brands sounding the charge were Louis Vuitton (which has “exceptional profitability”, reads the note) and Dior, as both grew in the double-digits.
The best-selling product is the Lady Dior bag, which “became a global icon”. LVMH considers “resilient” Loewe, Celine, Fendi and Marc Jacobs. Fashion & Leathergoods closed 2020 with revenue slightly down at -5% (current rates) and -3% (at constant rates), with a small erosion of the profits (-2%, due to recurring activates).
LVMH closed the year 2020 with a revenue of 44.7 billion euro, down 17% at current rates and 16% at constant rates. Profits from recurring operations was of 8.3 billion euro, down 28%, while net profits (4.7 billion euro) decreased 34%. The note reds that “LMVH enters 2021 with cautious optimism and, once more, the organization has set itself the goal of strengthening its global position as leader of the luxury goods’ industry”.
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