Bulgari keeps sparkling as jewellery and watch revenue hits GBP1bn.
LVMH Moët Hennessy Louis Vuitton has reported group revenue of €14 billion (£11.1bn) in the first half of 2014, with its jewellery and watch sector winning modest organic revenue gains of 3%.
In total, LVMH group sales organic revenue growth was 5% compared to the same period in 2013, with continued development in the US and Asian markets, and "resilience" in Europe despite an ongoing challenging economic environment.
Its watches and jewellery business showed small growth in H1 2014, with organic revenue from watches and jewellery up 3% but reported revenue falling 1%, to €1.26 billion (£1 billion). Jewellery brands owned by LVMH include Chaumet, De Beers, Bulgari and Fred.
However, profits from recurring operations suffered in H1, with LVMH’s watches and jewellery sector disclosing a decline of 31% to €107 million (£85m).
A statement from LVMH said: "The uncertainties linked to the economic environment continue to make multi-brand retailers prudent in their purchasing. The performance in the brands’ own boutiques exhibited significant growth. Bulgari benefitted from positive momentum in jewellery. TAG Heuer focused on the development of its iconic lines. The decrease in profit from recurring operations, which stood at €107 million, is principally explained by a negative exchange rate effect, while investments in communications continue".
As a group, LVMH profit from recurring operations for the first half of 2014 was €2.57 billion (£2 billion) and current operating margin reached 18%.
Negative exchange rate effects weighed strongly on the first half. Group share of net profit amounted to €1.51 billion (£1.12bn).
LVMH chairman and CEO Bernard Arnault said: "The results of the first half demonstrate LVMH’s excellent resilience, thanks to the strength of its brands and the responsiveness of its organization in a climate of economic and financial uncertainties. The first half of the year also witnessed the smooth integration of [fashion brand] Loro Piana into the group. Following the first half’s good resilience, it is with confidence that we approach the second half of the year and rely on the creativity and quality of our products, and the effectiveness of our teams, to pursue further market share gains in our traditional markets, as well as in high potential emerging territories."
Looking ahead, LVMH says that despite an uncertain European economic environment, it plans to continue to gain market share thanks to the numerous product launches planned before the end of the year and its geographic expansion in promising markets, while continuing to manage costs.
It said: "Our strategy of focusing on quality across all our activities, combined with the dynamism and unparalleled creativity of our teams, will enable us to reinforce, once again in 2014, LVMH’s global leadership position in luxury goods".