COMMENT: Luxury goods industry: future's looking good
LVMH has done well with a 10% rise in operating income but only achieved a marginal increase in turnover from €5.7 billion to €5.8billion. Fashion & leathergoods and wines & spirits units have performed well and the company continues to bankroll the selective retailing unit, where losses are declining.
However, other units have not done so well. LVMH has been jiggling with its jewelry and watches unit, ending the manufacturer of brands outside the group and changing the product line up, resulting in a 3% drop in sales.
Richemont has seen sales decline 5% on a like-for-like basis and will not even make concrete forecasts for the remainder of the financial year. In Europe, its most important market, sales fell by 6%.
Difficult economic conditions have impacted progress but the long-term prospects, particularly in Europe, are encouraging. In 2001, there were 22 million western Europeans with over €50,000 in disposable assets, a figure that is set to rise to 27 million by 2006. The value of the assets held by these wealthy consumers will increase from €5,000 billion to over €7,000 billion over the same period.
This growth in the number of wealthy consumers has the potential to fuel a boom in the prestige consumer goods industry, particularly in drinks and personal care, provided manufacturers and retailers take action to develop this growing market. Datamonitor predicts that prestige drinks sales will grow by 6.5% per year to reach a value of just under €4 billion by 2006, while prestige personal care will be worth €15 billion by 2006, growing at the slower rate of 3.9% per year.
By catering to the specific needs of consumers in search of prestige and protecting the core strengths of a brand while adapting its weaknesses to meet consumer needs, manufacturers and retailers can appeal to a new generation of prestige consumers.
Related research: Datamonitor, "Prestige Consumers" (DMCM0101)
Interest gathers for Taittinger and Lanson. In stark contrast to most of the French wine industry, sales of Champagne have been growing steadily and it is no surprise to find that the possible sale of...
Available from just-drinks' research store now is the "Global market review of Champagne." The review not only looks at markets around the world, but also gives profiles of the main players in the sec...
French luxury powerhouse LVMH Moet Hennessy Louis Vuitton has reported an 11% rise in full-year revenues from its wine and spirits business....
LVMH Moet Hennessy Louis Vuitton has welcomed a Chinese court's decision to fine two companies for infringing its trademark on Hennessy Cognac....
LVMH Moet Hennessy Louis Vuitton has distanced itself from the bidding for Lanson International, just-drinks understands....
Louis Vuitton Moet Hennessy (LVMH) has entered the running for a stake in Lanson International, according to press reports....
Revenue at LVMH Moet Hennessy Louis Vuitton reached €9.598bn for the first nine months of 2005, representing 12% organic growth from the corresponding period last year, the French drinks and luxury go...
LVMH Moet Hennessy Louis Vuitton has posted an 11% rise in profit from recurring operations for the first half of 2005, from €982m to €1.09bn....
- Whatever happened to binge Britain? - comment
- The dangers of squaring up to your competitor
- The US beer market - A level playing field for all
- Remy Cointreau's Q2 and H1 - preview
- Constellation and Ballast Point's "sticker shock"
- Diageo Australia appoints commercial head
- Sidney Frank CEO to head Clooney's import co
- Diageo sells off United Spirits' Bouvet Ladubay
- A-B InBev to "kick the tyres" at Coca-Cola
- Irish whiskey brands could fail without bulk
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research
- Future growth opportunities for global spirits
- Global Wine Market to 2019 - Market Size, Development, and Forecasts
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- Global Wine Market: News and Events September 2015