LVMH Profit from Jewelry Sales Plunges 47% in 2009

Jewelry and watch sales recovered in the last quarter, but did not erase three quarters of soft sales

LVMH Moët Hennessy Louis Vuitton recorded a revenue of €17.1 billion ($23.31 billion) in 2009. The luxury products group suffered a 1 percent decline in revenue and 13 percent drop in profit compared to 2008. The Watches & Jewelry segment suffered a severe blow, declining to €764 million ($1.04 billion).

The company’s Watches & Jewelry segment saw an improvement in trends in the fourth quarter, which limited the fall in reported revenue for the year to 13 percent. On an organic basis (on a comparable structure and exchange rates), the segment suffered from a 19 percent decline in revenue in 2009.

Annual profit from the segment stood at €63 million ($85.9 million).

“Despite considerable destocking by retailers and the decline of the American and Japanese markets, the Watches & Jewelry brands consolidated their market share,” the company reported.

“The jewelry brands’ own store networks demonstrated good resilience, benefiting from the success of iconic collections, such as Chaumet’s Attrape-Moi and Liens, Fred’s Force 10, and De Beers’ solitaire diamonds,” LVMH stated in its report.

Fourth quarter revenues by the segment rose 5 percent year-over-year, however the company did not state specific figures.

The group reported a record level of revenue in December, but, again, did not provide specific figures.

Profit from recurring operations was €3.35 billion ($4.6 billion) for the year and resulted in a current operating margin of 20 percent.

“LVMH demonstrated exceptional resilience in 2009,” said LVMH Chairman and CEO Bernard Arnault. “Sustained by its sound strategy, LVMH is ideally positioned to benefit from the recovery and to continue in 2010 to strengthen its leadership in the global luxury goods sector.”