The world's largest luxury goods group, LVMH, reported a 1% rise in 2011 net profit this week, as the company continues to show strong growth in its wine and spirits division, despite economic uncertainty in Europe. As reported on the drinks business, the group’s net profit topped €3 billion as sales jumped 16% last year, driven mainly by spending in Asia. "I'm going to be a bit repetitive because 2011 was an excellent year like 2010, and like I hope 2012 will be," said chief executive Bernard Arnault.
"After an exceptional 2011, LVMH is well-equipped to continue its growth momentum across all divisions in 2012. Its strategy will remain focused on developing brands through strong innovation, quality and expansion in high potential markets," he added. The French group’s portfolio includes Champagne brands Dom Pérignon, Krug, Veuve Clicquot and Moët & Chandon, Château d’Yquem in Sauternes, and Château Cheval Blanc in St Emilion. It also owns Glenmorangie and Ardbeg whiskies, and Belvedere vodka.
LVMH's robust performance sets high expectations for the luxury goods industry. "It's somewhat of a paradox to say that 2011 was a year of global prosperity, but we are lucky to export most of our products," Arnault said. The company’s latest figures show that the European debt crisis hasn't triggered a slowdown in the US. In the fourth quarter, sales in Europe rose 3%, but the strongest growth came from the US and Asia, excluding Japan.
Arnault doesn't see an end to LVMH's good fortune. "Barring a major accident and despite the difficulties in Europe, the world economy is growing and the world wants more and more of our products," he said. The company’s fashion division, which includes brands such as Louis Vuitton, Bulgari and Dior, also showed strong growth.