The Recovery Of China'S Luxury Goods Market Has Led To An Increase In The Profit Margin Of LV Parent Company?

　　 LVMH Profit growth has reached the highest level since 2011.

In the first quarter earnings report, LVMH said the camp's high growth may be due to poor performance in the previous year, rather than the revival of luxury goods. After three months' release of half a year's earnings report, LVMH finally relaxed. Luxury goods The market began to recover from China.

According to the world clothing and shoe net, yesterday, the French luxury goods giant LVMH released its first half 2017 earnings report. The total revenue of the company was 19 billion 700 million euros, up 15% over the same period. With the same quarter growth rate in the first quarter, we can see that LVMH has maintained two quarters of rapid growth. Net profit rose 24% to 212 million euros, the fastest since 2011.

The performance of LVMH's departments has reached two digit growth. Leather goods Sector revenue grew by 17% over the same period last year. The growth rate of Louis Vuitton brand declined slightly from 15% in the first quarter to 13% in the two quarter, but cooperation with Supreme is still a big bright spot. In addition, from the beginning of this quarter, fashion and leather goods departments have merged the performance of luxury luggage Rimowa. During the reporting period, the group's acquisition of Dior fashion department's spanaction has been completed.

Watches and jewellery sectors grew by 14% over the same period last year. Tiger's new smart watch has been a great achievement this year, and has been welcomed by young people. Sales of wine and spirits have increased by 10%. Thanks to the strong performance of SEF, the revenue of selected retail sector has increased by 12%. In the second half of this year, the company will continue to expand and refurbish existing stores.

Geographically, Europe, the United States and Asia all have strong performances. LVMH group CFO thanked the Chinese consumers for their generosity in the conference call, and also mentioned the rebound in the Japanese market. In the two quarter, the Japanese market, which had been showing weakness, rebounded due to the opening of Ginza Six mall.

In fact, Japan has a large number of discerning customers, and is regarded as one of the most expensive retail markets in the world by luxury brands. The stagnation of sales in recent years is mainly due to the instability of the younger generation of consumers and a significant decrease in the consumption of luxury goods. On the first day of Ginza Six, there were more than 90 thousand passengers and even 79 year old grandma with luxury bags.

In addition, LVMH CEO mentioned in the earnings report, the user experience improvement brought by LVMH digitalization. In June of this year, the LVMH self built e-commerce platform was formally launched. This part of the performance will be mentioned in the second half of the year. Just a few days ago, LV opened the first China electricity supplier service, and Chinese consumers could also use WeChat and Alipay to pay for localization.

In recent months, luxury brands have released first quarter and two quarter earnings reports. Hermes's revenue in the first half of the year has increased by 12%. Burberry's 4% growth in the first quarter has seen a big rise in its performance, and Gucci's parent company Kering's revenue growth has reached 31.2%. The luxury market is recovering as the dark clouds of terrorist attacks dissipate, tourism rebounds and Chinese consumers open their wallets again.

As early as the first quarter of this year, Kering CEO said that the luxury consumer market represented by China is undergoing large-scale recovery. However, LVMH did not dare to conclude that it is too early to talk about recovery. The growth of performance may be because the market environment was too bad last year, which has no guiding significance for the performance of 2017.

However, after issuing half yearly earnings, LVMH finally agreed that the global luxury market began to recover from the Chinese market after two years of slowing down. However, his CEO Bernard Arnault is still very vigilant against the resuscitation. He believes that the geopolitical and economic environment is still very uncertain, and that business needs to be cautious and unable to give a forecast of its performance in the second half of the year.

Arnault also had similar reasoning before. He believed that the global retail environment in the next ten years is likely to continue to deteriorate. Even now we have achieved good results, but we still need to be cautious about the future. For luxury brands, the Asian market will be the focus of the future.

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