Jewellery drives $4.1 billion profit for LVMH

Posted February 07, 2012 | By Aaron Weinman

Luxury goods company Louis Vuitton Moet Hennessy (LVMH) posted billion dollar profits on the back of its jewellery and watches division.

Boosted by the acquisition of Bulgari last March, the French company’s jewellery and watches division led the way for a net profit of $4.1 billion for 2011, according to the Washington Post.

Company statements said its jewellery and watch sector posted a 23 per cent increase in revenue, bucking the trend of retailers across Europe struggling in the midst of a debt crisis.

Overall, LVMH recorded a 16 per cent increase in revenue last year reaching 23.7 billion euros (AUD$28.9 billion) while its jewellery and watch segment recorded revenue of 1.9 billion euros (AUD$2.39 billion).

Company CEO Bernard Arnault noted that LVMH’s growth stemmed from its strength outside of Europe and said last year was prosperous for all markets bar the debt-riddled continent.

“We are fortunate enough to export most of our output and outside Europe 2011 was a year of prosperity around the globe,” Arnault said. “Therefore most of the export countries, not just the emerging economies but such countries as the US are driving most of our business.”

While European sales rose a modest seven per cent, this accounts for only one third of the company’s business. Sales in the US rose 18 per cent on 2010’s figures and Asian sales, excluding Japan, increased by 27 per cent.

“Our businesses enjoyed excellent momentum and profit from recurring operations passed the threshold of five billion euros for the first time,” Arnault said. “The agreement with the Bulgari family was one of the key moments of the year.”

Arnault expects growth to continue well into 2012 despite continued uncertainty in Europe’s economy.

More reading:
Jewellery and watches lead LVMH sales
Bulgari takeover buoys LVMH’s latest results