Lvmh Report

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Indiana PHAM
Julie PICHON
Romain PETIT
Marine PICHONNAT
Noémie PINEL

Luxury market

Introduction…………………………………………………………...3

I) LVMH, the uncontested leader on the luxury market………4 LVMH’s presentation…………………………………………………………..4 LVMH’s financial situation…………………………………………………….9

II)

LVMH, a globalized strategy on a competitive market...13
LVMH’s strategy……………………………………………………………...13 LVMH’s competitors in Asia…………………………………………………19

III) LVMH, growth perspectives on emerging markets…….23
India, China, the future for luxury brands?................................................23 LVMH’s perspectives………………………………………………………...27

Sources……………………………………………………………....29

CERAM Business School
Group B17
Case study

2

With more than 60 famous brands (Louis Vuitton, Christian Dior, Moet &Chandon…) and 5 sectors of activity, LVMH group imposes itself as the worldwide leader on the luxury market. Worldwide leader because since 1987, the group is in constant growth: 15 306 million Euros of turnover in 2006; a rather good profit margin (more than 60%) and a constant increase of dividends.

In an environment always more competitive, we can wonder what is the strategy of LVMH group to maintain its leading position. More than that, LVMH products and particularly Louis Vuitton products have a great success in China and the group realizes 17% of its turnover in this part of the world (except Japan), so what are the strategy and the potential of emerging countries for such a luxury brand? Finally, what are the future perspectives of the group?

CERAM Business School
Group B17
Case study

3

I) LVMH, the uncontested leader on the luxury market
LVMH’s presentation
LVMH is the leader of the luxury market in the world.Created in 1989; it is the result of the connection between Louis Vuitton and Moët&Chandon. At present, the Arnault family is the main shareholder of LVMH and Bernard Arnault is the CEO.

With a turnover of 14 billion Euros in 2006, it is present on the main luxury markets in the world, on the fashion and beauty markets and the group benefits from a huge portfolio composed by more than 60 brands.

LVMH is present in five sectors of activities:
Fashion and leather goods
Selective retailing
Wines and Spirits
Perfumes and cosmetics
Watches and jewellery
However, the group is well implanted in the United States, Europe and Asia. The American market represents more than 27% of the LVMH turnover, Europe 35% with 14% in France and Asia 31% with 14% in Japan.

Shops
In 2006, the group owned more than 1756 shops with more than 700 in Europe and 278 in France. It owns a lot of shops in Asia with more than 260 shops in Japan. LVMH Shops
2000

1501

1600

1526

1592

1693

1723

1758

Year

1286
1200
Number of shops
800

400

0
2000

2001

2002

2003

2004

2005

2006

Number of shops

CERAM Business School
Group B17
Case study

4

Human resources
At the end of 2006, there were 64 253 employees who worked for the group in the world. The percentage of women in LVMH was about 70% at the end of 2006.

Employees distribution in 2006

8908; 15%

Executives

9038; 15%
5716; 10%

Team managers and
technicians
Administrative employees
and sales employees
Production employees

35548; 60%

THE MAIN BRANDS IN EACH SECTOR

Sales by sectors in million of euros
6000
5222

5000

2004

4812

2005

4366

4000

3648

2006

3891

3276
2994

3000

2644
2259

2128

2285

2519

2000
1000

500 585

737

0
Fashion and
leather goods

Selctive retailing Wines and spirits

CERAM Business School
Group B17
Case study

Perfumes and
cosmetics

Watches and
jewellery

5

FASHION AND LEATHER GOODS
It is the most important sector for the group with a revenue of 5 222 million Euros in 2006. Louis Vuitton
Concerning leather goods, the most famous brand of the group is Louis Vuitton, founded in 1854, thanks...
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