Focus on watch component production and retail expansion in 2012.
LVMH’s watches and jewellery division enjoyed sparkling sales in 2011 with revenue growth of 23% and doubled profits compared to 2010’s figures.
In the year to December 31, like-for-like sales at the watch and jewellery group of LVMH businesses jumped 41%.
Watch brand TAG Heuer smashed its records for revenue and profitability in 2011 with particularly strong growth in China and South Korea. TAG is continuing to invest in building its retail network and now has nearly 130 brand-owned and franchised stores around the world.
LVMH said that a main focus for TAG is to “further industrialise its processes”. During 2011 the brand unveiled its groundbreaking Mikrograph 100 and the Mikrotimer Flying 1000 models, which were both built in house, and presented its first automatic movement built in house, the Calibre 1887. It also acquired ArteCad, a leading Swiss manufacturer of watch dials and will continue to produce mechanical movements, cases and dials through subsidiary Cortech.
Hublot “performed exceptionally well in 2011” according to LVMH and doubled the number of its stores, taking the total to 40. It added that the watch brand was expanding in all areas of its business and that the year was marked by a number of high-profile innovations including new grand complications line Masterpieces and a new scratch-resistant material it has dubbed Magic Gold.
As part of a “value-added strategy”, Hublot has enhanced its production capacities for watch movements and now directly manages all manufacturing processes for its UNICO chronograph movement and the mechanisms of its grand complications. The group has created a manufacturing facility for watch micro-components and has acquired Profusion, a distributor of carbon iber parts and components.
Zenith completed the renewal of its collections in 2011, which has been constructed around the brand’s five iconic lines. The brand has grown strongly in Asia and has continued to roll out stores in what LVMH dubs to be “high-value markets”, most notably in Hong kong and Geneva.
Bulgari recorded strong revenue growth in 2011 across all its product categories through its own stores as well as other distribution channels. New jewellery collections were received well, according to LVMH, and the brand continued to invest in store expansion and redesign projects.
At Chaumet the focus remained very much on China where it is expanding it presence “considerably”.
Montres Dior is continuing to expand its range of prestige timepieces and LVMH said that the 2011 launch of DiorVIII and the Grand Bal limited edition “created a sensation”. This push into higher end timepieces is couple with a tightening of the brand’s distribution policies.
De Beers enjoyed strong growth in 2011, particularly in Asia, and LVMH described it as “the clear front-runner in the diamond solitaire segment”. During the year, the jewellery brand opened its first store in China.
Jewellery brand Fred continues its targeted growth in France and Japan, with its main efforts focused in particular on its iconic Force 10 and Success lines. In the UK, the brand is now stocked at Harrods in London.
LVMH said that it expects the climate for watch and jewellery sales in 2012 to be “encouraging” and to further push the brands LVMH said that each will invest in marketing campaigns, new store openings with a particular focus on China, and will tighten up cost control.
A key strategy for LVMH’s watch division in 2012 is to develop industrial watchmaking capabilities for the production of in-house movements
Total group sales at LVMH in 2011 hit €23.7 billion (£19.7bn), an uplift of 16% year on year. Profits were up 22% to €5.26 billion (£4.67bn).
LVMH chief executive Bernard Arnault said: “2011 was another great vintage for LVMH, highlighting once again the power of our brands, the excellence of our craftsmanship and the appeal of our products. Our businesses enjoyed excellent momentum and profit from recurring operations passed the threshold of €5 billion for the first time. The agreement with the Bulgari family was one of the key moments of the year. In 2012, LVMH intends to further strengthen its global leadership position in high quality products by relying on its sound, long-term strategy.”