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LVMH saw its business cramble last year amidst the COVID-19 pandemic as many governments across the world forced retail shops and businesses to close down.
LVMH Moët Hennessy Louis Vuitton (EPA: MC) shares saw a 1.3% rise in the early trading session on January 27, after its fashion business brand Louis Vuitton put up a good LVMH performance in Q4. LVMH shares were among the top performers on CAC-40, France’s benchmark stock market index in the early stages of Wednesday, taking fellow french rival Kering along for the ride as its shares also rose by 1%. However, now the stock is 1.69% down, trading at 499.40 EUR.
According to analysts, LVMH’s fashion and luxury goods spearheaded by Louis Vuitton and other brands including Christian Dior performed better than they expected in the fourth quarter and led a resilient charge in the face of the pandemic which affected the company’s revenue.
China, one of the world’s biggest markets for luxury brands, helped companies bounce back after easing COVID-19 measures in the second half of 2020. LVMH recorded booming sales afterwards in China which was led particularly by the performance of Louis Vuitton which helped soften the impact of the pandemic on the company’s revenue.
Louis Vuitton, the group’s biggest revenue generator saw an 18% rise in sales year-on-year on a comparable basis. The rise was a build up on the third quarter performance after the group saw a 12% rise in its like-for-like sales, which strips out acquisitions and currency effects.
Jean-Jacques Guiony, the Financial Chief of LVMH speaking at a conference acknowledged the Q4 performance of Louis Vuitton, stating that new product launches planned before the pandemic including a Louis Vuitton handbag which was named after the Pont Neuf bridge in Paris, had helped the brand immensely.
Guiony added that the group also kept up with marketing spending whilst relatively smaller brands had cut backs. LVMH also holding catwalk shows in cities such as Shanghai in the midst of the crisis also helped the group, Guiony said. “Louis Vuitton and Dior were taking the bulk of customers’ attention when nobody was talking,” he added.
Berbard Arnault, billionaire boss of LVMH said in a statement that, the group is on course to build on a market recovery whiles Luca Silva, an analyst with Berstein also stated in a note that ”the strong beat should get LVMH’s share price home and dry.
LVMH saw its business cramble last year amidst the COVID-19 pandemic as many governments across the world forced retail shops and businesses to close down. The group took a hit after acquiring US jeweler Tiffany in a $15.8 billion deal in the middle of the pandemic.
Other spirit brands owned by LVMH which include Hennessy Cognac which operates airport duty free shops, all struggled as the decline in international travel cut short the revenues generated by luxury goods companies from tourists.