French luxury goods group LVMH profit increases as demand returns for Champagne and jewelry

LVMH first half net profit up 53 percent

PARIS — French luxury goods group LVMH SA said Tuesday that profit in the first half increased by 53 percent after a “robust rebound” in demand for expensive watches and jewelry and fine Champagne.

The Paris-based conglomerate behind Louis Vuitton luggage, Givenchy gowns and TAG Heuer watches reported net profit of €1.05 billion ($1.37 billion) in the six months through June, up from €687 million a year earlier.

LMVH Chairman Bernard Arnault said all business lines contributed to growth — including, notably, watches and expensive bubbly, which had seen demand tumble during the recession.

“The group approaches the end of the year with confidence,” Arnault said in a statement.

But he said that the “focus on cost control will continue into the second half of the year despite the momentum in the markets.”

Revenue rose 16 percent to €9.1 billion.

LVMH’s largest business segment, fashion and leather goods, reported an 18 percent rise in revenue in the first half and a 28 percent increase in profits from recurring operations.

Louis Vuitton reported “very strong” revenue growth of over 10 percent, and Fendi, Donna Karan and other fashion brands has a “good start to the year,” the company said.

But the big turnaround came in LMVH’s wine and spirits, and watches and jewelry divisions, which last year saw sales drop by over 10 percent.

In the first half, the company reported “robust rebound in orders from distributors.”

LVMH, which owns such well-known Champagne brands as Dom Perignon and Veuve Clicquot, said revenue in its beverage division rose 21 percent in the six month period, while profits from recurring operations increased 35 percent.

At the watches and jewelry division, which includes De Beers diamonds and Chaumet rings and necklaces, revenue was up 28 percent and profit increased by a massive 145 percent.

The company didn’t give a forecast for the year, but said it will continue gaining market share.

On Tuesday, LVMH shares closed down 2.9 percent at €92.26.