In 2020 first quarter, LVMH turnover went down by 15% as earnings amounted to 10.6 billion euros. Results turned out to be better than estimates issued by Bloomberg, which expected revenues to decrease by 17.8%. “The Group proves rather resilient while facing such worldwide challenge – commented Bernard Arnault –. Over a span of weeks, our work teams have been showing, once again, top-notch quality, creativity and responsiveness: thanks to these assets, we shall manage to get over the current crisis and, most of all, we shall come out on top, even stronger, when the emergency is over”.
Fashion & Leather Goods
In 2020 first quarter, Fashion & Leather Goods unit drove 41% of the overall turnover. Besides that, it held out against the emergency better than the other departments, mostly thanks to online sales. Organic downturn (not considering currency effects nor acquisitions) reached 10%, much less negative, then, than financial forecast (-15.8%). “Louis Vuitton and Christian Dior, in particular, kept enjoying a creative momentum”, they stressed in a press release. “As regards the other brands, they have been striving hard to strengthen their resilience. The manufacturing sites of the Group’s fashion houses are gearing up to open up again in compliance with top security standards for their employees, following work stop since mid-March”. LVMH also highlighted some business recovery in China, Taiwan and Korea.
A gradual recovery
While commenting data and figures, LVMH claimed it is quite hard to work out exactly the prospective impact of the pandemic on the group’s business. Yet, they are confident in a gradual recovery starting from May or June, “following a negative trend in the second quarter, still heavily hit by the crisis, especially in Europe and in the United States”. Aiming to tackle such emergency, LVMH board of directors are going to propose, during the general meeting, on the agenda on June 30th, a 30% reduction of shares of profit taken by shareholders (4.80 euros per share). Besides that, Arnault alongside members of the executive board decided to give up their April and May salary and the whole of floating wages throughout 2020. Furthermore, the board members will also reduce, by 30%, their own commissions on shareholding throughout 2020.
Pictures: Imagoeconomica photo, left; Bernard Arnault, right (Shutterstock)