Leading luxury group, LVMH Moët Hennessy Louis Vuitton registered revenue of €30.3 billion in the first nine months of 2020, down 21% year-on-year, while DFS saw a significant decline in its activity in most destinations as a result of the suspension of international travel, ‘which is showing no signs of improving’, said LVMH.

 

However, LVMH did highlight that some DFS downtown stores in Venice, Macao and Hong Kong had reopened, as previously reported by TRBusiness. 

 

In other news, LVMH filed its countersuit against Tiffany with the Delaware Chancery Court on 28 September, after making its intentions clear earlier in the month. To date, nine of the ten required regulatory authorisations have already been obtained and LVMH expects to receive approval from the European Commission by the end of October, it said in its Q3 results statement. The trial is scheduled for 5 January, 2021.

 

In the selective retailing division, which includes, Sephora and luxury travel retailer, DFS Group, organic revenue declined 31% in the first nine months of 2020.

 

FASHION AND WINES & SPIRITS SAW MOST IMPROVEMENT IN Q3

On a Q3 revenue results call held today by LVMH, Chris Hollis, Director of Financial Communications and Head of Investor Relations, said that international travel restrictions continued to ‘deeply impact’ the travel retail sector and while the group as a whole observed gains in Q3, travel retail revenue has been ‘fairly consistently down’ since the initial outbreak of Covid-19.

Hollis said that improvements in fashion & leathergoods and the wines & spirits divisions were strongest; down just 11% and 15% respectively.

 

“In a very turbulent context, marked by continuing economic and health uncertainties, LVMH will continue to exercise caution, strengthen its cost controls and selectivity in its investments,” said LVMH.

 

“The Group will maintain a strategy focused on preserving the value of its brands, by continuing its marketing and communication investments and relying on the exceptional quality of its products and the reactivity of its organisation. LVMH will rely on the power of its brands and the talent of its teams to further extend its global leadership in the luxury market in 2020.

 

The decision to pay an interim dividend will be discussed by the Board of Directors before the end of the month and announced thereafter.

 

‘GOOD RESILIENCE’ FROM SEPHORA

Sephora demonstrated good resilience during the health crisis, despite the fact that it had to close almost all its stores globally for nearly two months. Revenue improved in the third quarter and Sephora gained market share where the brand already has a strong presence, thanks in particular to strong online sales growth. “Supported by an innovative and varied offer, momentum within skincare products was strong,” added LVMH.

 

For the group overall, revenue was down 7% in the third quarter on an organic basis, reflecting a marked improvement in trends compared to the first half, notably a return to growth in Cognac and fashion & leathergoods.

 

The encouraging signs of recovery observed in June for several of the Group’s activities were confirmed in the third quarter in all regions, notably in the United States, and in Asia, which once again grew over the period.

The wines & spirits business group saw its organic revenue decline by 15% over the first nine months of 2020 and by 3% in the third quarter. After a significant drop in volumes in the second quarter, the Champagne business saw an improvement in the third quarter in all regions.

 

Hennessy Cognac recorded a strong recovery in the third quarter, driven by VS ranges in the context of ‘exceptional stimulus support for consumer demand in the United States’, said LVMH. “The Château d’Esclans and Château du Galoupet acquisitions, made in 2019, were integrated in 2020 for the first time, establishing a strong position for Moët Hennessy in the growing market for high-end rosé wines.” A new high-end rum, Eminente, launched in the third quarter.

 

The fashion & leathergoods business group saw its organic revenue decline by 11% over the first nine months of 2020 in an environment marked by the closure of stores for several months.

 

The third quarter saw a strong rebound in activity, with double-digit organic revenue growth. Louis Vuitton continued to display ‘exceptional momentum and creativity’, in all areas, from products to shows and customer events. During Fashion Week, the new collections were presented in an original format in the legendary renovated La Samaritaine building in Paris – currently not trading as a DFS Galleria as it was due to – as well as in Shanghai and Tokyo. In addition, Louis Vuitton opened a new workshop in France.

 

The perfumes & cosmetics business group recorded a 25% decline in organic revenue in the first nine months of 2020. The so-called ‘major brands’ are showing good resistance in a sector marked by a fall in both makeup demand and purchases made by international travellers, said LVMH, partially offset by the development in skincare.

Online sales grew steadily in the third quarter and there was a significant improvement in trends in stores as well. Parfums Christian Dior launched its new fragrance J’adore Eau de Parfum Infinissime and continues to develop Prestige and Capture skincare products. According to LVMH, Guerlain recorded ‘remarkable growth’ in skincare with the continued successes of Abeille Royale and Orchidée Impériale. The new skincare brand Fenty Skin, developed by Rihanna, is off to ‘a very promising start’.

 

The watches & jewellery business group saw its organic revenue decline by 30% in the first nine months of 2020. The rebound in China was observed in the third quarter, but did not prevent the overall activity from dropping by 14% in the period. Bvlgari unveiled a new line of Barocko fine jewellery.