For LVMH, the Covid-19 pandemic seems truly over: the French luxury group sold more Louis Vuitton handbags and Moët champagne in the second quarter and is now on track to significantly exceed its pre-pandemic sales.
Full steam ahead in second quarter
The group, belonging to French billionaire Bernard Arnault, mainly benefited from a sharp increase in demand for luxury goods in the United States and China. The market is also recovering in Europe, albeit more gradually.
LVMH recorded 28.7 billion euros in sales over the first six months of 2021, up by more than half compared to the same period last year. Compared to 2019, pre-pandemic, there was an organic growth of 11 %. The recovery that had already started in the first quarter was accelerated further in the April-June period.
Leather goods and champagne
The fashion and leather goods division, which generates almost three-quarters of annual operating profit and includes brands such as Louis Vuitton and Christian Dior, was the driving force behind the bulk of the growth. It largely compensated for continued weakness in what was LVMH’s second-biggest business before the pandemic: “selective retailing”, which relies heavily on duty-free shops in airports.
In addition, sales of wine and spirits picked up strongly. Revenues of that division were 12 % higher than its pre-pandemic levels. Demand for champagne was strong in Europe and the United States, the Financial Times writes.
Record share price
The increased profitability also shows that LVMH has overcome the challenges of the crisis: operating profit tripled to 7.6 billion euros, which is also 44 % above the (pre-pandemic) 2019 level.
On the stock market this year, LVMH shares have risen to their highest ever price. Based on market capitalisation, the luxury group is now the largest company in Europe.
