Jamie Matusow, Editor10.01.14
Update: LVMH ranks at #9 on our latest report Top 20 Global Beauty Companies 2021.
Paris, France
www.lvmh.com
Corporate Sales: $40 billion
Beauty Sales: $5.1 billion
Key Personnel: Bernard Arnault, chairman and chief executive officer; Antonio Belloni, group managing director; Pierre Godé, vice chairman; Nicolas Bazire, development and acquisitions; Chris de Lapuente, Sephora; Philippe Schaus, DFS Group.
Major Products: Perfumes, cosmetics and skin care brands including Christian Dior, Guerlain, Givenchy, Kenzo, Benefit, Fresh, Make Up For Ever, Acqua di Parma, Parfums Loewe, Fendi and Pucci—and LVMH’s DFS travel retail network, which includes Sephora.
New Products: Diorskin Nude BB Créme, Dior Addict Fluid Stick, Parfums Givenchy Dahlia Divin, Kenzo Parfums Flower in the Air, Fan di Fendi pour Homme, Benefit Cosmetics POREfessional, Benefit They’re Real Push-Up Liner, Sephora Collection: The Beauty of Giving Back Blush Palette, Abeille Royale skin care, Chinese skincare brand Marubi.
Comments: A challenging economy didn’t put much of a damper on luxury goods. Thanks to the continued allure of “the finer things” to global consumers in developing as well as developed markets, corporate sales at LVMH hit a new high of $40 billion in 2013, a 4% jump over the previous year.
In its major stance as purveyor of a mostly French portfolio of French beauty brands with international presence—as well as a couple of promising U.S. and Spanish brands—sales of cosmetics and fragrances outperformed the market, rising nearly 3% last year. Perfumes accounted for 45% of sales (down from 48% in 2012), followed by cosmetics (37%) and skincare products (18%). By region, Europe (excluding France) accounted for 32% of sales, followed by Asia (excluding Japan; 24%), other markets (14%), France (13%), U.S. (12%) and Japan (5%).
Parfums Christian Dior continued to gain market share, with flagship lines including J’adore, Dior Homme, Rouge Dior and the development of Dior Prestige skincare. La Petite Robe Noire from Guerlain also continued to grow, as did Orchidée imperial skincare. U.S. based Benefit recorded another year of strong growth and Make Up For Ever and Fresh both did particularly well in Asia.
Benefit has reportedly tripled its business in the last five years and is poised to hit $2 billion annually in the next five years.
To advance R&D, LVMH opened its new Hélios research center at Saint-Jean-de Braye during the year. The 250 researchers at Hélios are working on developing new processes, and securing new patents in the fields of cosmetics and the beauty sciences. In retail, the luxury seller reopened Guerlain’s boutique on the Champs-Elysées in Paris.
In July 2013, following nearly three years of negotiations, LVMH-backed private equity fund L Capital Asia announced its plan to invest in Chinese domestic cosmetics brand Marubi, which LVMH hopes to propel into the global spotlight with a possible Dior partnership and Sephora distribution.
Selective Retailing
Travel retail and selective retail played strong roles in increasing sales of perfumes and cosmetics. The company’s Selective Retailing business group recorded organic revenue growth of 17% in 2013. DFS Group, an operator of duty-free shops controlled by LVMH, continued to grow, due especially to three new upgraded concessions at Hong Kong International Airport. Hong Kong and Macau maintained strong momentum even though the weak Yen reduced Japanese travellers’ spending, especially in Hawaii.
Sephora continued to achieve what Arnaud called “an exceptional performance” and gained market share in all of its regions. The retailer’s online revenue also did well. Arnaud said that innovation, increased personalization of customer relations, and strengthening of service offerings, both in store and online, are at the core of Sephora’s strategy. Sephora’s exclusive offering was boosted in particular by the new Marc Jacobs cosmetics line.
First Half 2014
For the first half of 2014, LVMH recorded revenue of $19 billion, an increase of 3% over the previous year. The Group continued to grow in the U.S. and Asia. Europe showed some resilience despite a still challenging economy. Regional results in the second quarter were similar to trends in the first quarter, except in Japan, which had been stronger during the first quarter.
Perfumes & Cosmetics rose 2% over the previous first half in 2013, to reach $2.5 billion.
Moving ahead, LVMH has vowed to remain strong in R&D, build upon key brands such as Christian Dior and Guerlain, and continue global development of other brands.
Just last month, Sephora Americas announced the opening of its new, state-of-the-art distribution center in Perryman, MD. The 655,000-square-foot Mid-Atlantic Distribution Center facility will be the largest distribution center serving Sephora Americas.
Paris, France
www.lvmh.com
Corporate Sales: $40 billion
Beauty Sales: $5.1 billion
Key Personnel: Bernard Arnault, chairman and chief executive officer; Antonio Belloni, group managing director; Pierre Godé, vice chairman; Nicolas Bazire, development and acquisitions; Chris de Lapuente, Sephora; Philippe Schaus, DFS Group.
Major Products: Perfumes, cosmetics and skin care brands including Christian Dior, Guerlain, Givenchy, Kenzo, Benefit, Fresh, Make Up For Ever, Acqua di Parma, Parfums Loewe, Fendi and Pucci—and LVMH’s DFS travel retail network, which includes Sephora.
New Products: Diorskin Nude BB Créme, Dior Addict Fluid Stick, Parfums Givenchy Dahlia Divin, Kenzo Parfums Flower in the Air, Fan di Fendi pour Homme, Benefit Cosmetics POREfessional, Benefit They’re Real Push-Up Liner, Sephora Collection: The Beauty of Giving Back Blush Palette, Abeille Royale skin care, Chinese skincare brand Marubi.
Comments: A challenging economy didn’t put much of a damper on luxury goods. Thanks to the continued allure of “the finer things” to global consumers in developing as well as developed markets, corporate sales at LVMH hit a new high of $40 billion in 2013, a 4% jump over the previous year.
In its major stance as purveyor of a mostly French portfolio of French beauty brands with international presence—as well as a couple of promising U.S. and Spanish brands—sales of cosmetics and fragrances outperformed the market, rising nearly 3% last year. Perfumes accounted for 45% of sales (down from 48% in 2012), followed by cosmetics (37%) and skincare products (18%). By region, Europe (excluding France) accounted for 32% of sales, followed by Asia (excluding Japan; 24%), other markets (14%), France (13%), U.S. (12%) and Japan (5%).
Parfums Christian Dior continued to gain market share, with flagship lines including J’adore, Dior Homme, Rouge Dior and the development of Dior Prestige skincare. La Petite Robe Noire from Guerlain also continued to grow, as did Orchidée imperial skincare. U.S. based Benefit recorded another year of strong growth and Make Up For Ever and Fresh both did particularly well in Asia.
Benefit has reportedly tripled its business in the last five years and is poised to hit $2 billion annually in the next five years.
To advance R&D, LVMH opened its new Hélios research center at Saint-Jean-de Braye during the year. The 250 researchers at Hélios are working on developing new processes, and securing new patents in the fields of cosmetics and the beauty sciences. In retail, the luxury seller reopened Guerlain’s boutique on the Champs-Elysées in Paris.
In July 2013, following nearly three years of negotiations, LVMH-backed private equity fund L Capital Asia announced its plan to invest in Chinese domestic cosmetics brand Marubi, which LVMH hopes to propel into the global spotlight with a possible Dior partnership and Sephora distribution.
Selective Retailing
Travel retail and selective retail played strong roles in increasing sales of perfumes and cosmetics. The company’s Selective Retailing business group recorded organic revenue growth of 17% in 2013. DFS Group, an operator of duty-free shops controlled by LVMH, continued to grow, due especially to three new upgraded concessions at Hong Kong International Airport. Hong Kong and Macau maintained strong momentum even though the weak Yen reduced Japanese travellers’ spending, especially in Hawaii.
Sephora continued to achieve what Arnaud called “an exceptional performance” and gained market share in all of its regions. The retailer’s online revenue also did well. Arnaud said that innovation, increased personalization of customer relations, and strengthening of service offerings, both in store and online, are at the core of Sephora’s strategy. Sephora’s exclusive offering was boosted in particular by the new Marc Jacobs cosmetics line.
First Half 2014
For the first half of 2014, LVMH recorded revenue of $19 billion, an increase of 3% over the previous year. The Group continued to grow in the U.S. and Asia. Europe showed some resilience despite a still challenging economy. Regional results in the second quarter were similar to trends in the first quarter, except in Japan, which had been stronger during the first quarter.
Perfumes & Cosmetics rose 2% over the previous first half in 2013, to reach $2.5 billion.
Moving ahead, LVMH has vowed to remain strong in R&D, build upon key brands such as Christian Dior and Guerlain, and continue global development of other brands.
Just last month, Sephora Americas announced the opening of its new, state-of-the-art distribution center in Perryman, MD. The 655,000-square-foot Mid-Atlantic Distribution Center facility will be the largest distribution center serving Sephora Americas.