In spite of a significant loss of revenue compared to last year, LVMH (Louis Vuitton Moët Hennessy) appears to still be committed to buying American luxury jewellery company, Tiffany & Co.
This news comes alongside the release of LVMH’s financial report on its Q2 financial performance, in which it announced year-on-year revenue losses of 38% in the second quarter.
This figure, meaning a 28% overall revenue loss in the first half of 2020, left many worried for LVMH.
Furthermore, its total profits from recurring operations in Q1 and Q2 were down 68% on last year.
It also reported a 39% decline in organic revenue for its watch and jewellery brands in the first half of the year.
LVMH cited lockdowns and the restriction on travel as the main reasons for its decline in turnover, but was thankful for an increase in online revenue during the period.
The company itself remained confident based on what it had to say regarding its planned acquisition of Tiffany & Co.
LVMH concluded its financial report: “The closing date of the planned acquisition of Tiffany & Co depends on the receipt of the final regulatory approvals.
“The decision to pay an interim dividend will be discussed by the board of directors in October and announced, as appropriate, at that time.”
It also added: “In a very turbulent context, the group will maintain a strategy focused on preserving the value of its brands, based on the exceptional quality of its products and the responsiveness of its teams. In the current situation, the group will further strengthen its policy of controlling costs and being selective in its investments.
“The impact of the epidemic on revenue and annual results cannot be precisely assessed at this stage without knowing the timetable for the return to normal business in the different areas where the group operates. After a second quarter severely affected by the crisis, we can hope that the recovery will materialize gradually in the second half.”
Read Professional Jeweller‘s take on the uncertainty surrounding the deal in recent months: