Retailers remain ‘prudent’ in purchasing, LVMH says

Paris--Same-store sales of watches and jewelry rose slightly in the first half for LVMH, with the company noting that the retailers that carry its brands remain cautious when purchasing.

Watches & Jewelry group sales for LVMH Moët Hennessy Louis Vuitton totaled $1.71 billion in the first half of the year, a 1 percent decline from $1.72 billion in the first half of 2013 but a 3 percent increase with comparable structure and constant exchange rates.

Profit from recurring operations for the group were down 31 percent, which LVMH said was mainly due to exchange rate fluctuations and also to investments in communications.

Sales at the company-owned jewelry and watch boutiques, which recorded “significant growth,” continue to outperform those of its wholesale accounts, where “the uncertainties linked to the economic environment continue to make multi-brand retailers prudent in their purchasing,” LVMH said.

LVMH’s watches and jewelry division is comprised of TAG Heuer, Hublot, Zenith and Dior Watches as well as Italian jeweler Bulgari, Chaumet, Fred and De Beers Diamond Jewellers Ltd., the chain of retail stores it operates in a joint venture with De Beers.

Among the LVMH’s other groups, Selective Retailing, which includes Sephora stores, posted the strongest first half results with organic sales growth of 9 percent. Perfumes & Cosmetics was next at 6 percent, followed by Fashion & Leather Goods at 4 percent. Sales fell 1 percent for the Wines & Spirits group.

Total sales for the group increased three percent from $18.35 billion to $18.86 billion. Profit fell 5 percent.

Commenting on the group’s first half results, Chairman and CEO Bernard Arnault said the strength of the company’s brands and its responsiveness help it to manage “in a climate of economic and financial uncertainties.”

For the rest of 2014, the Paris-based luxury goods conglomerate said it expects to continue to gain market share because of its numerous product launches planned for the next six months and despite economic uncertainty in Europe.