LVMH reports strong perfume sales despite China concerns

By Michelle Yeomans contact

- Last updated on GMT

LVMH reports strong perfume sales despite China concerns
Despite the Chinese market proving tough for some of LVMH's brands, the luxury goods firm reported a 6 per cent increase in its perfumes and cosmetics division.

The Chinese market was tough on the player's Hennessy cognac sales this year with sales declining in China, Macau and Hong Kong.

However, revenues from the beauty division were looking up, amounting to €2,159m.

Luxury powerhouse Dior led the way with its scents while Guerlain also saw success with La Petite Robe Noire and Abeille Royale fragrances.

The news will, without doubt come as a relief to LVMH which has been working harder then ever to attract Chinese tourists as luxury spending slowed down in Hong Kong.

Despite reports that Chinese shoppers are the region's biggest buyers of luxury products, LVMH found itself among various prestige players facing a tough fourth quarter last year due to pro-democracy protests.

The Hong Kong protests against mainlanders in the New Territories ran for 79 days last year and kicked off again in February, which has seen anti-graft measures affect sales in China. 

These measures clearly affected LVMH, as the group reported its first fall in operating profit in five years earlier this month.

According to the South China Morning Post, the French player's core earnings fell 5 per cent to €5.7 billion in 2014, thanks to the likes of the 'anti-graft' drive pushing expensive bottles for gifting out of favour.

'Remaining open'

At the end of last year, LVMH stated that it remained on the lookout for acquisitions in skin care in Asia, but that the priority was with the launch of U.S. beauty brand Fresh on the region, which it has owned since 2000.

When asked by Reuters if the group would be interested in Clarins if it was up for sale, managing director Antonio Belloni said it "favoured smaller businesses with more room to grow."

"We remain open to acquisitions, but for now we are focused on rolling out Fresh in Asia​," the MD told the news agency.

LVMH's portfolio also includes beauty retail giant Sephora and Christian Dior perfumes, which, on the contrary performed well on the region.

Related topics: China, Fragrance, Business & Financial

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