Benefit, Dior and Make Up Forever grow as fashion sales fall flat
LVMH has shared its financial results for Q1 2016, reporting disappointing sales in the light of declining tourism. Key markets France and Hong Kong have both seen a drop in the number of tourists – a key target for the luxury goods conglomerate’s brands.
Sales remained flat in fashion and leather goods, but revenue for cosmetics and perfume increased 7% compared to the same period last year. Christian Dior was a key driver of growth, with new male fragrance Sauvage seeing “remarkable success” and Poison Girl named as a “highlight of the quarter”.
Other cosmetics brands said to be performing well include Guerlain which expanded its La Petite Robe Noire collection into make-up and Benefit, which LVMH credited with “strong innovation” in the sector. Kendo and Make Up For Ever are also said to be “expanding rapidly”.
However, recent terror attacks in Paris and Brussels have had a negative impact on sales in a key region. In a statement, LVMH said: “Europe remains well orientated except for France, which is affected by a fall in tourism.” Economic concerns in Asia have also started to dampen sales. LVMH said: “Asian markets are varied, but Japan continues to progress.”
LVMH owns more than 60 luxury brands, all in areas expected to decline over the course of this year. A combination of fears over terrorism attacks, slower growth in the US and economic troubles in Asia is behind the prediction.
Looking ahead, LVMH said that it would continue to focus on developing its brand while maintaining “a strict control over costs” and continue to invest in the quality and innovation of its products.