BEAUTY REPORT: LVMH
LVMH DF&TR beauty brands exceed expectations in 2017 as structured approach begins to take off
Trading conditions in Asia Pacific were far from ideal in 2017 due to the THAAD missile crisis and other external influences. As Andrew Pentol reports, LVMH’s perfume and cosmetics brands still managed to excel in the region, and continue to do so in 2018.
Above: Benefit Cosmetics is continuing to grow thanks to its eyebrows, makeup products and mascaras.
L
ast year, luxury conglomerate LVMH Moët Hennessy Louis Vuitton registered another
record performance, with perfumes and cosmetics revenue rising by 12% (reported) from €4.95bn ($5.85bn) in 2016 to €5.56bn ($6.57bn). Overall, the group generated total
revenues of €42.6bn ($50.3bn), an increase of +13% over the previous year, with +12% organic growth. But it was far from plain sailing, with external influences such as the THAAD missile crisis proving a significant challenge. Reflecting on the performance
of the Asia Pacific perfumes and cosmetics DF&TR business, LVMH Travel Retail Director Asia Pacific Andre Marzloff tells TRBusiness: “At the end of the day we exceeded expectations.
“As far as Asia Pacific was concerned we had a major issue with the THAAD situation, but it did not impact sales as much as we thought.”
Andre Marzloff, Travel Retail Director Asia Pacific, LVMH
40 TRBUSINESS
Make Up For Ever remains strong among Chinese consumers and is recognised for its visibility with Korean retailers such as The Shilla Duty Free.
JUNE 2018 “As far as Asia Pacific was
concerned we had a major issue with the THAAD situation, but it did not impact sales as much as we thought. “Most of the brands posted
really strong results and exceeded expectations.” Momentum continued into the
first quarter of 2018, during which time P&C revenue rose by 8% to €1.50bn ($1.77bn) compared to the same period in 2017. LVMH Group revenue rose by 10%
to €10.8bn/$12.8bn (reported) in Q1 2018, with organic growth yielding +13% (improving to +15% excluding the impact of DFS Group’s exit from the Hong Kong Airport concessions). Overall, Asia, the US and Europe
experienced ‘good growth’, according to LVMH. The Middle East also showed signs of recovery,
suggests Marzloff. “I am not a specialist in terms of this region, but it has certainly been suffering over the past few years,” he comments. “I have a feeling we have reached
the bottom and that the market is recovering little by little. It was enjoying huge growth a few years back, but has suffered due to different crises. It is now rebuilding itself and I look forward to seeing better results.”
Forex advantages Regarding the Asia Pacific travel retail business, this is mainly driven by Chinese consumers. Marzloff comments: “They are
enjoying a more favourable exchange rate, which has led to increased buying power. “The mood in China is very positive
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