While Louis Vuitton has been embroiled in its ex-ambassador Kris Wu’s scandal (for alleged predatory behavior towards underage girls) its parent company LVMH has delivered outstanding results for its first half 2021, beating analysts’ expectations.
On July 27, the French Group released its first half 2021 earnings report, with a remarkable 53 percent revenue increase compared to 2020, jumping to $33.9 billion. This was due to the strong performance of its fashion and leather goods division, as well as its hard luxury sector. Indeed, Louis Vuitton and Dior have both continued to perform strongly, followed by Fendi and Celine, which also delivered brilliant results. And now, with the addition of Tiffany & Co., its watches and jewelry category also soared, up 122 percent.
Asia, especially China, continues to drive LVMH’s major growth, accounting for nearly 40 percent of the group’s revenue; the market reported a jump of 30 percent compared to 2020 and 70 percent in 2021.
Moreover, the conglomerate’s efforts in leveraging K-pop stars is now paying off on the mainland, suggesting that the Korean wave is on the mend. Three out of the four popular Blackpink band members are endorsing the company’s brands (Lisa for Céline, Rosé for Tiffany, and Jisoo for Dior), while Louis Vuitton recently announced boy super group BTS as its in-house ambassadors.
The question remains, when international travel resumes, will sales in China decline? According to Bernard Arnault, Chairman and CEO of LVMH, the answer is no. “Within the current context, as we emerge from the health crisis and see a recovery in the global economy, I believe that LVMH is in an excellent position to continue to grow and further strengthen our lead in the global luxury market in 2021,” Arnault said on the earnings call.
However, this time LVMH’s cash cow Louis Vuitton may be in a bit of trouble; its late response to the Kris Wu scandal has raised the ire of many Chinese netizens, who are accusing the brand of standing by sexual predators. But even if by some chance Louis Vuitton under performs in the second half 2021, LVMH’s bullpen is still loaded with giants like Dior, Celine, and Tiffany. Given this, the group’s diverse, resilient portfolio should help it mitigate any possible future declines in any one category or brand — in China or the world beyond.