Louis Vuitton's 'Surprise Performance'... 3Q Fashion Division Sales Up 12%

Analyst Forecast '1% Drop' Reversed... LVMH Leather & Fashion Division Achieves 5.9 Billion Euro Sales
Cautious Optimism on COVID-19 Shock Recovery
Watch & Jewelry Division Sales Down 14%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] LVMH, the luxury company owning numerous world-renowned brands such as Louis Vuitton and Dior, has shown signs of recovery from the impact of the novel coronavirus disease (COVID-19).

According to the Wall Street Journal (WSJ) on the 15th (local time), LVMH announced that sales in the leather and fashion sectors increased by 12% year-on-year to 5.9 billion euros (approximately {$_..._}).

This performance far exceeded analysts' forecast of a 1% decline.

In particular, considering that LVMH's fashion and leather product sales decreased by 37% in the first half of this year compared to last year, consumer demand appears to have revived in the third quarter.

However, overall, LVMH has not yet fully overcome the impact of COVID-19. Third-quarter sales were 11.96 billion euros (approximately 16 trillion won), down 7% from the previous year.

Especially, due to social distancing and reduced overseas travel caused by COVID-19, LVMH's major revenue sources, such as the luxury champagne business and airport duty-free shops, were hit.

Sales in the watch and jewelry sector decreased by 14% during the same period.

The WSJ analyzed that "LVMH's struggles in the watch and jewelry sector may have been a factor in its decision to abandon the acquisition of the American jeweler Tiffany."

Last month, LVMH declared the termination of the Tiffany acquisition deal worth about 19 trillion won, citing Tiffany's failure to take any action despite financial difficulties caused by COVID-19.

Meanwhile, Tiffany announced that although sales in August and September slightly declined, operating profit increased thanks to strong performance in the Chinese market, indicating recovery from the impact of COVID-19.

This content was produced with the assistance of AI translation services.