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LVMH achieved record profit in 2019. In the fourth quarter, the sales rose 12% to 15.27 billion euros ($16.94 billion). But the coronavirus may negatively influence the company’s revenue.
Spread and control of the coronavirus outbreak in China has impacted the sales of popular multinational conglomerates, LVMH, according to published revenue records.
China’s Hold on Luxury Revenue
According to records posted by LVMH, the recent disease outbreak surfacing very early in the year has already begun to affect overall sales of goods, significantly.
The recent outbreak comes as a bigger test to last year’s skid with Hong Kong, which fortunately couldn’t stop the company from making profits. Despite the sharp decline in tourist visits to Hong Kong late last year, LVMH still showed record sales in the last quarter of 2019. The company revealed in a statement that its last quarter sales increased by 12 percent to 15.27 billion euros ($16.94 billion), even in the midst of the constant anti-government protests broiling in the Asian state. The recorded profit marked an 8 percent improvement on the previous year’s sales.
However, the new situation of a possible disease epidemic is proving more serious to last year’s unrest, and hopes of revenue profits increasing again are pinned on how fast the disease is curtailed.
That the outbreak is having telling impact on LVMH’s sales is no surprise, as the biggest luxury companies have about a third of their profits coming from shops in China alone. A hit to China is enough blow capable of rendering an entire year a bad one. However, LVMH head, Bernard Arnault, remains optimistic that the disease would be curtailed soon.
Flagships Louis Vuitton and Christian Dior Sparing Blushes
Increase in sales last quarter while down by almost 40 percent as a group in the midst of the anti-government protests in Hong Kong were offset by emphatic sales by LVMH’s flagship labels, Louis Vuitton and Dior.
A new set of Vuitton goods recorded enormous sales in the last quarter, while Dior, at its exhibit in London, attracted more than six hundred thousand people, as losses in other quarters were salvaged.
We Can Only Wait
Amid the fear and worry crawling among investors in the group, Bernard Arnault has moved to ensure everyone remains calm. In his response to his predictions on how much impact the outbreak could give, he said:
“The first reaction is: Don’t panic, let’s calmly analyze the situation.”
Then commenting on reports he has personally received from Chinese authorities, he revealed that postulations expect the virus to have died out by early March.
“That’s the information we have. If it dies out in two months or two months and a half, it’s not terrible. If it takes two years, that’s a different story,” he told reporters.