MercoPress. South Atlantic News Agency

China’s appetite for luxury goods fuels record sales and profits for Louis Vuitton

LVMH, (Louis Vuitton) boss Bernard Arnault: growth is back

China's appetite for luxury goods fuelled a record year for sales and profits at world industry No. 1 LVMH, (Louis Vuitton) prompting boss Bernard Arnault to say the market had entered a “new growth cycle”.

Arnault, France's richest man and the Chief Executive of LVMH hailed the result as evidence of a full-blooded upturn and anticipated the business can do still better this year with help expansion in new countries such as Mexico and Malaysia.

”We have entered a new economic cycle. Growth is back... a cycle of three years. After (that) it is difficult to predict,” Arnault said, adding he had noted an acceleration of positive trends in January compared to year-end.

Arnault rarely speaks about the outlook for the sector or his group's future performance. The luxury sector suffered its worst slump in 2009 as consumers, concerned about their jobs and the economic future, put a lid on spending. But it bounced back in 2010 much more quickly than many analysts expected.

On Friday Louis Vuitton SA reported a 73% jump in 2010 net profit to 3.03 billion Euros, up from €1.76 billion earned a year earlier, while revenue rose 19% to a record €20.32 billion. LVMH said profit from continuing operations rose 29% to €4.32 billion.

The world’s biggest luxury-goods company said its watches and jewellery unit recorded the strongest sales growth, with revenue rising 29% to €985 million. Asia ranked as the fastest-growing market for all its brands, which include TAG Heuer and Zenith, the company said.

The fashion- and leather-goods arm, which includes the iconic Louis Vuitton brand, was the next strongest division, with revenue rising 20% to €7.58 billion.

And in the wines and spirits business, which includes the Moet & Chandon, Dom Perignon and Hennessy brands, China cemented its position as the group’s No. 2 market, LVMH said.