French luxury group LVMH reports profit drop
LVMH Moet Hennessy Louis Vuitton net profit fell 23 percent despite a 0.2 percent gain in sales in the first six months of the year.Paris - French luxury giant LVMH, maker of Louis Vuitton bags and Moet champagne, on Monday reported a 23-percent profit drop for the first six months of 2009 to EUR 687 million.
But the company's turnover edged up 0.2 percent from the same period in 2008 to EUR 7.81 billion despite a sharp drop in sales of drinks and jewellery.
The company said in a statement that its results "demonstrated good resilience" in the face of slower sales in recession-hit markets.
LVMH chief Bernard Arnault said: "The first half results once again demonstrate the exceptional appeal of our brands as well as the effectiveness of our strategy, particularly remarkable given the global economic crisis."
"Reassured by the good resilience in the first half of the year, the Group approaches the second half with confidence," he said, adding that there would be cost-cutting measures and expansion in emerging markets.
LVMH said champagne sales had dropped because of de-stocking by distributors, while the Asian market had helped keep cognac sales buoyant. Wine and spirits sales were down 17 percent overall compared with the first half of 2008.
Jewellery sales were also down 17 percent and cosmetics revenues fell six percent but the company's fashion and leather goods sector instead grew eight percent from last year with Louis Vuitton gaining market share, the firm said.
AFP / Expatica