How LVMH bounced back with record profits in 2021: buying Tiffany & Co., raising Chanel prices, and tempting luxury shoppers back to Louis Vuitton, Celine and Loewe boutiques

Feb 7 , 2022

As the Omicron variant began spreading, US consumers dialed back spending at a range of retail outlets during the December holiday shopping season, yet LVMH still ended the year with record-breaking sales. Photo: AFP

LVMH clocked a record US$71.6 billion in revenue from last year, with sales from LV, Dior and Tiffany & Co. leading the French luxury group’s sudden rebound from Covid-19

The lack of Asian tourists in Europe has taken a toll on groups like Sephora and duty-free unit DFS, while the group is yet to name a replacement to trailblazer Virgil Abloh

LVMH SE posted record annual sales as well-heeled customers snapped up items ranging from Christian Dior couture to Hennessy cognac, cementing the group’s rebound from the depths of the pandemic.

Revenue last year totalled US$71.6 billion, the Paris-based company said, topping the previous record set in 2019, before Covid-19 lockdowns closed stores and kept shoppers stuck at home. Analysts had expected revenue of US$69.2 billion.

A model presents a creation from Christian Dior’s Spring/Summer 2022 Haute Couture collections during Paris Fashion Week on January 24. Photo: Xinhua

The performance of the luxury giant, led by billionaire Bernard Arnault, exemplifies the V-shaped recovery experienced by much of the industry as wealthy customers rushed back to boutiques. The pace of the rebound was underpinned by recovering economies and soaring asset prices.

As the dominant purveyor of luxury goods, LVMH benefited from its range of products, from US$1,000 Louis Vuitton tattoo sneaker boots to Tiffany engagement rings. Organic revenue for its main fashion and leather goods division, which includes Celine and Loewe on top of Louis Vuitton, jumped 42 per cent from 2019 levels.

Beyoncé and Jay-Z are the new brand ambassadors of LVHM’s Tiffany & Co. Photo: Tiffany & Co./YouTube

LVMH’s selective retail category, which includes Sephora and duty-free unit DFS, and the perfumes and cosmetics group, are the only two divisions that have yet to see sales match 2019 levels amid a subdued flow of Asian tourists to European capitals. During the virtual presentation before analysts and reporters, Arnault warned that international travel may not return before next year or 2024.

Tiffany, which joined the group a year ago, had a “remarkable” performance despite the brand’s flagship store on New York’s Fifth Avenue being closed for refurbishment, Arnault said. The store is set to reopen by the end of this year, he added.

Tiffany’s performance was a “very nice surprise, confirming the positive trend in jewellery already displayed by Richemont”, said Cedric Ozazman, chief investment officer at Reyl & Cie in Geneva.

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