LVMH reports strong sales in tough luxury market

The France-based luxury goods company today posted eight per cent sales growth for the first nine months of 2007, taking total sales for the period to €11.45bn from €10.63 last year. The perfumes and cosmetics category performed particularly well, with sales growing nine per cent to €1.96bn over the nine months. Organic sales growth, accounting for exchange rates and other factors, was higher at 12 per cent. Sales of luxury goods have been hit in recent months by the economic slump in the US but LVMH, which sells 25 per cent of its goods in the country, swam strongly against the tide. Nonetheless, sales were highest in the more buoyant economies in Europe and Asia. The company's strong performance in perfume and cosmetics was led by the Christian Dior brand, which successfully launched the female fragrance Midnight Poison this year. After LVMH's half year results in July the company's CEO Bernard Arnault said the continued development of the Christian Dior brand would be a priority for the company. Other successful releases mentioned by LVMH during the first nine months include Guerlain's L'Instant Magic and Pucci's Vivara as well as TokyobyKenzo and Palazzo Fendi. The progress of LVMH's colour cosmetics brand Benefit also contributed significantly to growth. Selective retailing, which includes the Sephora cosmetic and fragrance outlets, increased sales by six percent to €2.88bn for the first nine months of the year. Sephora continued to win market share in Europe and the US and expanded its business in developing markets such as China. LVMH confirmed its expectation of a significant increase in its results for 2007.