FRANCE: Leather goods drive LVMH full year profit
Luxury goods leader LVMH Moët Hennessy Louis Vuitton said strong leather goods trading contributed to a 21% jump in 2005 net profit.
LVMH's full-year net profit totalled EUR1.44bn, just missing an average forecast of EUR1.46bn. Operating income was up to EUR2.74bn from EUR2.37bn last year.
LVMH said the results were thanks to "strong momentum in organic growth, contributed to by all business groups and geographic regions".
Chairman and chief executive Bernard Arnault said: "LVMH has once again confirmed the strength of its business model, which is built on creativity and quality. The financial performance of the group in 2005 shows the effectiveness of a development strategy based on an exceptional portfolio of brands and on the complementary nature and successful geographic balance of its activities.
"It has enabled LVMH to once again strengthen its position as global leader and to export worldwide its French and European manufactured products. With all these elements in place, 2006 will be another year of strong growth."
The Louis Vuitton fashion brand showed an "exceptional level of operating margin", the company said, with especially good trading in the US, Asia and Europe.
Total fashion and leather goods profit from recurring operations was up 12% during the year. New collections from Marc Jacobs, particularly his denim range, saw "enormous success", LVMH said.
It added: "Fendi reaped the benefits of its new strategy and saw an improvement in its profitability in 2005. Similarly, Marc Jacobs and Pucci enjoyed an excellent year, thus confirming, together with Fendi, their potential as star brands."
LVMH will pursue its strategy of concentrating on internal growth and the development of its leading brands in 2006.
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