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In 2010, LVMH exceeded $27 billion in revenue, including $5.4 billion in profit from current operation, $4 billion in net profits and $4 billion in cash flow, all of which are record-breaking figures for the brand. LVMH executives attribute the conglomerate’s success to the outstanding quality of its products and hard work.
“It has been an exceptional year, an outstanding year,” said Bernard Arnault, founder/CEO of LVMH, Paris. “They are remarkable figures and I’d like to pay tribute to all the teams represented here who made it possible to achieve such a remarkable performance in each of the business areas of the group.
“The figures themselves are nothing but the consequence of the excellent quality of products and excellent strategy and are a direct reflection of the strategy of what we have conducted over the past few years,” he said. “Day in and day out we focus on the quality of our products and the quality of our shops and try to make sure that our people are doing the best that they can.”
LVMH is a conglomerate encompassing luxury brands such as Louis Vuitton, Marc Jacobs, Tag Heuer, Parfums Christian Dior, Givenchy and De Beers.
An exceptional 2010
The corporation can attribute its success to a few brands in particular.
Per LVMH, the fashion and leather goods sector, as a whole, recorded a revenue growth of 20 percent and a 29 percent increase in profit from recurring operations.
A brand that especially stood out was Louis Vuitton, who in and of itself had a record year, and its appeal to customers is constantly strengthened by its dynamic creativity, per LVMH.
The leather manufacturer opened the Maison boutique in London, which strengthened its presence in Europe.
The brand’s print, out-of-home, digital and mobile strategies are all enhanced by multichannel marketing, particularly with strong magazine and newspaper ads, social media marketing and mobile applications.
Louis Vuitton has a well-trafficked Facebook and Twitter presence, ecommerce Web site, the mobile application “100 Legendary Trunks” and has spreads in most fashion and luxury lifestyle magazines.
“The buying of high-quality French products is a demand that is bound to continue,” Mr. Arnault said. “I am very confident indeed.”
Other LVMH brands such as Fendi, Céline and Loewe also increased revenue.
In the watch and jewelry sector, which itself reported 29 percent growth, Tag Heuer seemed to stand out the most.
The brand successfully launched a new watch movement in honor of its 150th anniversary, while also increasing its presence in Asia.
Tag Heuer also collaborated with Parsons — The New School for Design, where students competed to come up with watch designs (see story).
Hublot, De Beers and Chaumet also reported solid growth, as well.
LVMH’s perfumes and cosmetics recorded continued excellence, particularly with Parfums Christian Dior and Parfums Givenchy.
One of Christian Dior’s scents, J’adore, has been marketed with the help of Charlize Theron in the iconic commercial.
Lastly, the brand’s wine and spirits sector, including Dom Pérignon, Krug and Moët & Chandon, saw an increase of 19 percent in revenue.
What’s next?
The conglomerate will continue to market its various brands, through all media outlets.
LVMH’s stress on the importance of the quality of products and the quality of the organization’s stores is the main reason for the economic boom.
The brands have a constant quest for quality on each of the business areas in LVMH, and that is what the success is based on, per Mr. Arnault.
LVMH is well equipped to bolster its brands through marketing initiatives in 2011.
“Ever since 2010, we have entered a new economic cycle, we have a resumption of growth – January has shown business picking up compared to last year,” Mr. Arnault said. “We are looking at growth again and my vision is that we are looking to a three-year cycle until 2012, and what comes after that is difficult to predict.
“We certainly expect 2011 to be as good as 2010,” he said. ”We are the one organization in the world that shows the finest potential in the universe of luxury goods.”
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