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LVMH sales surge in post-Covid bounceback
French luxury goods giant LVMH – home to brands including Louis Vuitton, Dior and Tiffany – flew past forecasts in the third quarter, posting a sizeable increase in sales as affluent shoppers flocked back to their favourite luxury brands, and international tourism opened back up.
Sales were up 19% year-on-year, driven by increased demand for fashion and leather goods. Shoppers in Europe, the United States and Japan led the charge, according to LVMH’s recent earnings call. Americans have made the most of the strong dollar, splurging on LVMH brands while travelling, with Europe seeing a 43% increase in sales.
Why it matters
Not long ago, the luxury category was forced to adapt as many of its high-end, bricks-and-mortar stores were closed due to Covid restrictions. But even in tougher economic times, the luxury category is largely resilient, and as those restrictions are lifted, the category is bouncing back.
Despite the gloomy economic headwinds hitting Europe and the US in particular, LVMH remains optimistic about the resiliency of luxury retail.
Jean Jacques Guiony, LVMH's chief financial officer, said “demand for our brands remains very vigorous”, noting that “luxury is not a proxy for the general economy”.
The company is planning to accelerate plans to invest in marketing targeted at wealthy shoppers over the key holiday retail period, which runs from Thanksgiving in the US, through Christmas and into Chinese New Year.
“We’ve not started belt tightening since there is no need to,” Guinoy said. “We must continue to invest because the growth is still there.”
Sources: Reuters, Financial Times
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