FRANCE: LVMH FY fashion and leather earnings tumble
The fashion and luxury goods division was the second worst performer of the group in 2013
French luxury goods giant LVMH Moët Hennessy Louis Vuitton saw earnings decline at its fashion and luxury goods division in fiscal 2013 due to investments in repositioning its Louis Vuitton brand.
In the 12-month period, earnings fell 4% to EUR3.14bn (US$4.25bn) from EUR3.26bn a year earlier.
Last year, the company turned the focus of the Louis Vuitton brand to more exclusive products and fewer logo items in a bid to stoke consumer demand. It has also been buying stakes in others as part of a repositioning of the division.
While organic sales in the division climbed 5% to EUR9.88bn, the fashion and luxury goods division was the laggard of the group in 2013 and was the second worst performer behind watches and jewelry.
Group earnings, however, climbed 2% to EUR6.02bn as the company maintained good momentum in the US and Asia and continued to grow in Europe, despite the challenging economic environment.
Operating margin remained flat at 21% and revenues were up 4% to EUR29.1bn over the previous year.
"2013 saw another excellent performance from LVMH despite exchange rate volatility and slower growth in the European markets," said chairman and CEO Bernard Arnault.
"Despite an uncertain economic environment in Europe, LVMH is well-equipped to continue its growth momentum across all business groups in 2014.
"Driven by the agility of its organisation, the balance of its different businesses and geographic diversity, LVMH enters 2014 with confidence and has, once again, set an objective of increasing its global leadership position in luxury goods."
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