The world’s largest luxury retailer has reported a drop in first-quarter same-store sales, while denying reports that it plans to sell its premium wine and spirits unit, Moet Hennessey. LVMH saw same-store sales drop by 7% year-on-year in the quarter ending 31 March, even as revenue amounted to E4.02bn, after being hurt by sharply lower demand for its alcohol, watches and jewellery.

Like-for-like revenues at its wine and spirit unit dropped 22% to E540m, those at its perfumes and cosmetics unit were down 11% to E663m, and they were down 41% to E154m at its watches and jewellery unit. The company said demand for cognac and champagne had fallen in recent months, while its Tag Heuer watch and De Beers jewellery divisions were affected by the downturn in the US market. The only growth came from fashion and leather goods, its biggest division, which saw sales rise 4% to E1.6bn.

The group also denied that it was in talks to sell its wine and spirits unit, after media reports said Diageo was planning an E12bn bid. It simultaneously also said that it was also not looking to make any acquisitions “in the hard luxury market”, which includes jewellery and watches.

Looking ahead, the group said it faced an “exceptionally challenging environment”, a rather strong statement given its previous generally upbeat forecasts. It added, “The efforts to adapt to the current context will continue throughout the year through the strict management of costs and selective investments”.

NamNews - Thursday 23rd April 2009

 

See column on the right for related news items
or search our NamNews Archive containing over 9 years of industry news (Subscriber-only)