The over-riding austerity didn’t stop LVMH’s revenues rising from €17.1bn the previous year. The group’s Louis Vuitton brand recorded a 29% increase in operating profit, forming 59% of overall group profits. Punters were also necking back luxury champagnes like Dom Pérignon and Krug - wines and spirits bounced back from a decline in 2009 to a 19% rise in revenues to €3.3bn.
Turnover at LVMH’s fashion and leather goods wings leapt 20% to €7.6bn, sales of perfumes and cosmetics gained 12% to €3.1bn, and profits at the group's watches and jewellery division doubled. No wonder chairman and chief executive Bernard Arnault described the year as a ‘great vintage’ for the company.
It shows once again that just as the likes of Aldi and Lidl are managing to thrive in the tougher climate at the lower end of the glamour scale, their haughtier cousins seem equally suited to the times too. As the LVMH example shows, those at the top of the income scale are as happy to splash out as they ever were. Richemont, the Swiss luxury goods group, the UK’s Mulberry and Tod’s, the Italian bags and shoes company, all reported buoyant Christmas trading too. You just don’t want to be a brand sat in the middle, getting squeezed like a vice at both ends.
Of course, these days there are also plenty of new punters on the luxury goods scene. LVMH is doing very well over in China, which is creating hordes of aspirational super-wealthy people who, for some reason, wish to express this through the medium of Louis Vuitton luggage. A report from Barclays Capital says China now accounts for 12% of global luxury goods sales – and the country’s market is set to rise 20%-30% a year.
So the good times look set to roll for a while yet. as far as Arnault is concerned. But he doesn’t seem happy to simply rest on his laurels and quaff the profits. He’s just ruled out flogging his stake in fellow luxury group Hermès International, saying he wants to be an active investor - much to the undoubted chagrin of the controlling Hermès family. Arnault joined last October, with a controversially-acquired 20.2% holding. We can imagine the bubbly may remain on ice in the Hermès household for now.