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Champagne sales suffer at LVMH
French luxury brands group LVMH has seen its wine and spirits sales slide in the first half of this year.
Revenues on its drinks brands were down 17% to €1.079 billion, while profits from recurring operations fell 41% to €241 million.
LVMH Champagnes which include Moët, Dom Pérignon, Veuve Clicquot, Krug and Ruinart were particularly hard hit due to “massive destocking” by distributors.
The group as a whole reported a slight increase (0.2%) in revenue to €7.8bn but 12% fall in profits to €1.36bn.
Hardest hit was the company’s watches and jewellery division, with profits dropping 73% to €20m.
Fashion and leather goods however enjoyed a 8% revenue increase to almost €3bn and 7% profit rise during the first half of 2009.
“Louis Vuitton has had a particularly exceptional first half year, probably the best in the luxury universe,” said Bernard Arnault, chairman and CEO of LVMH, on the fashion sector’s positive performance.
On wines and spirits, LVMH noted, “The difficult economic environment weighed on revenue and profitability of the wines and spirits business group. Champagne revenue was impacted by the high stock levels at distributors who destocked massively in the first half. With trends improving slightly in the second quarter, the Cognac business was more resilient and was supported by its Asian markets. While sticking to cutting costs and vigorously selecting its investments, the wines and spirits business group will continue its value strategy and maintain its strong culture of innovation.”
Patrick Schmitt, 30.07.09