LVMH and Kering continue to grow, despite Chinese economic downturn
The latest figures announcing significant growth in the luxury industry at LVMH and Kering coincide with a disappointing result of China’s GDP. What are the consequences on the sector? Our analysis.
By Cristina D’Agostino21 octobre 2021
€ 44,2 Bn
LVMH sales for the first 9 months of 2021
€ 12,23 Bn
Kering sales for the first 9 months of 2021
Chinese GDP in July and August 2021
The post-pandemic recovery has definitely been confirmed by the latest figures for Q3 202 which show exceptional growth for luxury groups such as LVMH, Kering and Hermès.
LVMH, Kering and Hermes equity have globally been growing from 35% to 40% over the past two years
Arthur Jurus, Senior Strategist at the ODDO BHF bank
Yet will the disappointing evolution of Chinese GDP to 4.9% in July and August, the cost rise of raw materials, the real estate crisis worsened by the giant Evergrande’s downfall, and even the several announcements by Chinese government officials regarding inequalities impact the luxury industry? Arthur Jurus, Senior Strategist at the ODDO BHF bank explains: “Indeed there has been a drop in equity prices, including for luxury groups, at the announcement of China’s GDP on October 18, but the trend remains positive. LVMH, Kering and Hermes equity have globally been growing from 35% to 40% over the past two years. Hermes’ specificity in terms of stock performance is to have grown by 46% in 2021, Richemont by 37% and LVMH by 30%. By comparison, the European financial stock markets have reached 17% growth since the beginning of the year. Globally, the luxury sector is doing very well. The correction in stock markets is due to the fact that they are flow markets.”
A relative growth depending on regions worldwide
LVMH results over the last nine months of 2021 all point to the same direction with 44.2 billion euros of revenue, an organic growth of +40% vs 2020 and +11% vs 2019. The Kering results, issued on October 19 total 12.23 billion euros over the first nine months, growing by 36.6% vs 2020 and +9% in organic growth vs 2019.
To continue reading this articles, subscribe now
CHF 10.- per month / CHF 99.- per year
- Unlimited access to all paid content
- Industry analysis you won't find anywhere else.
- In-depth case studies on key business challenges.
- Academic analyses, studies and publications written by professors and researchers from the Swiss Center for Luxury Research and some foreign universities.
- Members-only events to grow your knowledge and network.
Share the post
“The pre-owned business: best growth option for watchmaking”
Watchfinder &Co, leader in pre-owned watches, is multiplying partial exchange programs with brands. Its cofounder Matt Bowling sees here the best option for watchmaking to increase its new watch sales.
“For luxury hospitality, this pandemic will help better foresee the next ones”
Facing the worst crisis in their history, luxury hotels are left with no other choice but to reinvent themselves. This will mean digitalization, new concepts and better sanitary risk management. That is Philippe Rubod’s belief, CEO of Swiss Hospitality Global.
Be notified of the latest publications and analyses