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Luxury Industry Performance: January – March

A comprehensive listing of the latest financial results reported by key luxury brands, as the industry once again enters a period of sales prosperity

Reports of double-digit revenue growth, across the luxury board, seems to have the media championing the return of luxury consumption to pre-crisis levels, citing the end of the global recession. If recent reports are anything to go by, their arguments have some merit: the collective wealth of high-net-worth-individuals increased by 22 percent last year (Knight Frank), whilst spending on luxury goods increased 12 percent (Altagamma).

Analysts however, warn that we are not yet out of the woods, citing examples of Greece and Portugal as the press shine spotlights on stars like Brazil, China and India. Whatever the case, it is undeniable that there is a significant level of optimism in the luxury industry and a set of impressive revenue results recently announced

Growth forecasts by Industry, comparing those made in October 2010 and May 2011 (Altagamma Consensus)

In the recently released worldwide markets monitor, developed by Bain & Co in partnership with Altagamma, the growth forecast for luxury sales was increased from 3-5 percent to an almost double 8 percent. According to Reuters ‘boosted by a stronger-than-expected rebound in the United States and Europe and surging demand in China’. In terms of global revenue, Bain estimate that luxury goods will reach a record 185 billion euros in 2011, compared with 172 billion in 2010.

As the major players in our industry announce their quarterly results, we present a round up by industry subsector, to give our readers an indication of the health of the industry in this current climate.

All figures below are Gross Revenue unless otherwise stated.

Luxury Conglomerates

LVMH Group

Recording first-quarter revenue of €5.2bn, LVMH Moët Hennessy Louis Vuitton demonstrated a 17% comparable increase to Q1 2010. The group released an accompanying statement, revealing an intention to focus efforts on developing brands, maintain a strict control over costs and target investments related to the quality, excellence and innovation of products and distribution.

Key divisions reported the following increases in sales:

Wines & Spirits +20%
Fashion & Leather Foods +17%
Perfumes & Cosmetics +9%
Watches & Jewellery +28%
Selective Retailing +20%

PPR Luxury

PPR’s reported first-quarter revenues of €3.71bn, of which the Luxury division accounted for €1.12bn: growth of 26.2% when compared to Q1 2010 and the most significant within the group’s portfolio. In an official statement PPR revealed that the ‘excellent start to the year’ was powered by ‘fast-paced growth of the Group’s businesses in emerging countries,’ which accounted for 21% of overall revenue.

Key brands within the luxury division reported the following increases:

Gucci +20%
Bottega Veneta +32%
Yves Saint Laurent +27%
Other Luxury Brands +21%

Richemont

No doubt buoyed by the 2010 acquisition of Net-a-Porter, Richemont reported Annual revenues of €6,892 million, for 12 months ending 31st March 2011. An increase of 33% as compared to €5,176 million at March 31 2010.

“We had a record year in sales and profit and cash flow. Sales grew by 33% while we had a record year for our Jewellery segment and our Specialist Watchmakers. And our net profit passed the EUR1bn mark, while our cash flow grew by more than EUR1.7bn”, remarked Deputy Chief Executive Richard Lepeu.

Key divisions reported the following increases in sales:

Jewellery Maisons +29%
Specialist Watchmakers +31%
Montblanc Maison +22%
Other businesses +66%

Fashion & Accessories

Hermès

Q1 2010: €507.7 million
Q1 2011: €637.1 million
Increase 26%

Coach

Q3 FY2010: $951 million
Q3 FY2011: $831 million
Increase 14%

AEFFE s.p.a

Q1 2010: €63.6 million
Q1 2011: €73.4 million
Increase 17.4%

Tod’s s.p.a.

Q1 2010: €208.1 million
Q1 2011: €243.7 million
Increase 17.1%

Hugo Boss

Q1 2010: €444.2 million
Q1 2011: €539.2 million
Increase 21%

Luxottica

Q1 2010: 1,391.7 million
Q1 2011: 1,556.1 million
Increase 11.8%

Burberry Group PLC
Annual results, year ended March 31 2011

2009/2010 Revenue: £1,280 million
2010/2011 Revenue: £1.5 billion
Increase: 27%

Travel & Hospitality

Accor Hotels
Up & Midscale Hotels (Sofitel)

Q1 2010: €717 million
Q1 2011: €770 million
Increase 5.7%

Marriott

Q1 2010: $83 million
Q1 2011: $101 million
Increase 22%

Starwood

Q1 2010: $179 million
Q1 2011: $208 million
Increase 16%

Hyatt Hotels

Q1 2010: $109 million
Q1 2011: $112 million
Decrease 2.7%

Automotive

BMW

Q1 2010: €12,443 million
Q1 2011: €16,037 million
Increase 28.9%

Tata Motors
Jaguar Land Rover

Q3 FY2010: £1,961 million
Q3 FY2011: £2,660 million
Increase 35.6%

Daimler AG
Mercedes-Benz Cars

Q1 2010: €11,595 million
Q1 2011: €13,860 million
Increase 20%

Beauty & Wellbeing

L’Oreal
Luxury Division

Q1 2010: €1,013 million
Q1 2011: €1,117 million
Increase 7.7%

InterParfums

Q1 2010: $119.4 million
Q1 2011: $133.4 million
Increase 11.7%

Estée Lauder

Q3 FY2010: $1.86 billion
Q3 FY2011: $2.17 billion
Increase 16%

Jewellery & Timepieces

Tiffany & Co

Q1 2010: $634 million
Q1 2011: $761 million
Increase 20%

Bulgari

Q1 2010: €199.1 million
Q1 2011: €254.7 million
Increase 28%

La Montre Hermès

Q1 2010: €507.7 million
Q1 2011: €637.1 million
Increase 25.5 %

Wines & Spirits

Pernod-Ricard

Q3 FY2010: €1,543 million
Q3 FY2011: €1,620 million
Increase: 5%

Diageo
Organic net sales growth

Q3 FY2011: 7%

To view or download Fondazione Altagamma’s updated studies, on the performances and the forecasts of the world wide luxury markets, please follow the below links

Altagamma Worldwide Markets Monitor

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