LVMH drinks sales rebound in 2010
Renewed demand for luxury drinks such as Dom Pérignon and Krug Champagnes and Hennessy Cognac in Asia has helped fuel record revenues of €20.3 billion for 2010 at LVMH.
Chairman and chief executive Bernard Arnault described 2010 as a “great year” for the company, which specialises in luxury goods ranging from drinks to fashion to watches.
The wines and spirits division recovered from a decline in 2009 to record a 19% rise in revenues to €3.3bn.
All its Champagne brands enjoyed a period of recovery, with the prestige cuvées such as Dom Pérignon and Krug performing particularly well.
LVMH added: “Hennessy Cognac, which proved its resilience during the crisis, continued its excellent performance, and its superior, high-end qualities increased strongly with the rapid growth of emerging markets.”
Arnault also admitted that the company will not be making an offer for Rémy Cointreau Champagne brands Piper-Heidsieck and Charles Heidsieck, which were both put up for sale towards the end of last year.
"Yes, we looked at that – but no more," he said in a conference call with analysts.
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Arnault also said that speed of the recovery from the economic crisis has left the company facing something of a Champagne shortfall as it struggles to meet the renewed demand across the globe.
"We found ourselves in a situation where supply and availability becomes short," he admitted. "You may remember that back in 2009 all the papers said that it was a Champagne crisis.
"[Moët Hennessy president] Monsieur [Christophe] Navarre would come to us and say ‘we have all this inventory – what should we do with all the bottles?’
"Some other companies were dumping their stock, [but] we decided to buy more. But we didn’t buy enough and now with the recovery and on resumption of the market, we found ourselves short."
Alan Lodge, 07.02.2011
