LVMH's Fashion Business Is Doing Just OK

Here's hoping Nicolas Ghesquière's first collection for Louis Vuitton is success with shoppers when it hits stores in the fall.
Avatar:
Eliza Brooke
Author:
Publish date:
Social count:
218
Here's hoping Nicolas Ghesquière's first collection for Louis Vuitton is success with shoppers when it hits stores in the fall.
Nicholas Ghesquière's first collection for Louis Vuitton. Photo: Imaxtree

Nicholas Ghesquière's first collection for Louis Vuitton. Photo: Imaxtree

After growing aggressively for several years, LVMH's fashion business is taking a bit of a breather. Revenue for fashion and leather goods grew 4 percent for the first half of 2014, while profits flatlined relative to the same time last year. As company execs said on an earnings call Thursday afternoon, the latter point is a result of adverse exchange rates.

That said, Louis Vuitton has a lot of potential to improve its position in the second half of the year, thanks to the "creative momentum" (LVMH's words) of Nicolas Ghesquière's first collection for the brand, which hits stores in the fall; hopefully its critical appeal translates into sales. Céline is showing growth thanks to its leather goods and footwear, while Fendi's success rides on focusing on its more iconic bags. 

With a new CEO in place, Marc Jacobs is also getting a lot of attention from LVMH for his brand's growth potential. Of course, he helmed design at Louis Vuitton before handing over the reins to Ghesquière for fall 2014.

"As you know, we have a lot of hopes for this company. We think it's a very well-positioned brand in the contemporary segment, and we expect to develop it much further. That's why Marc devoted 100 percent of his time to this brand," an exec said on the call.  

That "100 percent" dedication to a single brand is a sentiment reflected by Hermès, which has selected Nadège Vanhee-Cybulski to replace former creative director Christophe Lemaire, who has gone on to focus on his own brand. As Vanessa Friedman wrote in the New York Times Thursday morning, Hermès seems to see the drawbacks of a designer splitting his or her time between two fashion houses — apparently LVMH feels the same way, at least when it comes to Marc Jacobs.