Recent currency changes — like the strengthening of the U.S. dollar, the fall of the euro and, even more precipitously, the ruble — have done wonderful things for the bottom lines of Europe's biggest luxury companies. Last week, Hermès reported that sales were up 22 percent in the first half of the year (but only 10 percent at constant currency rates). Kering, meanwhile, reported Monday that sales were up 17 percent in the same time period (but only 3.5 percent on a comparable basis). And LVMH reported Tuesday that sales were up 19 percent in the first half (versus 6 percent if those jumpy currencies had just stayed where they were), and profits up 15 percent.
Still, it was an "excellent" quarter in the words of LVMH Chairman and CEO Bernard Arnault, and the second quarter (sales up 23 percent, or 9 percent on a constant currency basis) was even stronger than the first.
Fashion and leather goods, by far the company's most important division, were up 5 percent on a constant currency basis for the half. Louis Vuitton was a standout — the brand's leather goods experienced "strong growth" thanks to the success of the Monogram bag and new leather lines. Loro Piana was boosted by new store openings, and Fendi — which is known, of course, for its fur — saw a boost in its leather goods and accessories sales. (We're guessing those famous fur buggies had something to do with it.) Céline, Givenchy and Kenzo also experienced strong growth, the company said.
The only two brands not doing so well? That would be Marc Jacobs and Donna Karan, which "continued the repositioning of their collections" in the first half. Marc Jacobs, as you'll recall, has shuttered its standalone Marc by Marc Jacobs contemporary line and is in the process of introducing a wider range of price points to the main Marc Jacobs label. And LVMH has said goodbye to Donna Karan and her designer collection; her name will live on in the DKNY line, which is now helmed by the creative directors of Public School, Maxwell Osborne and Dao Yi Chow.
Moving beyond fashion, it was LVMH's smallest division — watches and jewelry — that saw the most growth, up 10 percent at constant currency rates. (Apparently it was the jewelry that did all the selling, as multi-brand watch retailers exhibited "cautious purchasing behavior.") Perfumes and cosmetics performed solidly as well, increasing 6 percent, led by sales of Dior's classic J’adore and Miss Dior scents. Guerlain also saw success with its La Petite Robe Noire and Abeille Royale fragrances.
So it was a solid first half, and LVMH has much to look forward to. The company said that despite economic and currency uncertainties, it expects to continue gaining market share against its competitors thanks to the many product launches and geographic expansion plans it has lined up over the second half of the year.