Speaking at a post-results call after LVMH posted strong full-year 2022 results, CEO and Chairman Bernard Arnault said: “We’re refusing and we’re fighting against so-called parallel exports. A number of our peers need to generate revenue and don’t hesitate to sell through resellers who buy products abroad and then sell them on at discounted prices in China. But we avoid that”.
In a clear reference to the South Korean duty free market which has been almost solely reliant on the daigou business into China during the pandemic, Arnault commented: “I mean it’s quite fascinating to see the duty free stores where there’s nobody – because their airports were empty – were generating huge sales, huge revenues”.
“Why? Because the products never arrived on the stand. They went straight from the inventory – the reserve of the seller – to the professional seller who sold them on a discount in China. I mean, for your image, there is nothing worse. It’s dreadful.”
LVMH Chief Financial Officer Jean-Jacques Guiony also referred to the daigou market when assessing the performance of the Perfumes and Cosmetics division. “It’s a more challenging situation because we deliberately decided to contain or indeed delete all parallel channels in travel retail around the world”.
Bernard Arnault: “We have every reason to be confident – indeed optimistic – on the Chinese market. In Macau, where [Mainland] Chinese can now travel to, the change is quite spectacular. The stores are full. It’s really come back at a very strong pace.”. Arnault added “It’s creativity that enhances the brands’ desirability. And that’s what guides our teams above all.”
“So now part of that demand will move out offshore when the markets reopen, but it will be a long time before the percentages change. And also, the Chinese market is bigger now than in 2019. There are more customers now than there were in 2019. All the numbers are up. So, for the proportions to change significantly and to have much more offshore proportionally will take a while.”
On the keys to sustained success: “It’s creativity that enhances the brands’ desirability. And that’s what guides our teams above all. It’s the desirability, be it for our fashion & leather-goods activities or for all the other activities of the group.”
On Louis Vuitton: “We never give the figures of Louis Vuitton but it’s a major milestone this time so we give it. We said this when we crossed the €10 billion mark [and now] Louis Vuitton has exceeded €20 billion in terms of revenue.”
On Tiffany: “Tiffany for the first time will exceed the €1 billion in profit from recurring operations. We were barely at half that when we acquired the business. Everyone said to me, ‘Why are you buying this business at that price? It’s far too much.’ Well, if the business were to be listed today… it would probably be worth twice as much.”
On Bvlgari: “The high point of this year for Bvlgari will be the opening of the flagship on 5th Avenue on the corner of 57th. But as we’re already doing over €200 million in the provisional store I think we’re going to double or even more the annual sales in this new store, which will be wonderful.”
On LVMH’s contribution: “This magnificent group that has spectacular results is also a group that has a great economic and social footprint for France. In 2022, we recruited worldwide close to 40,000 young people. In France alone, we recruited over 15,000 people, making the group the leading recruiter in France in 2022.”
On 2023: “If it continues as it is, it’ll be an excellent year. We’ll be able to continue to develop our investments, gain market share, because even when the situation is somewhat more challenging, [and something] is going to happen from one month to the next, we continue to invest.
“Whereas some of our peers may have tighter financial constraints, they stop investing or they invest less. And so, things are more difficult afterwards. We continue to invest and… it’s been quite successful for us during the difficult times when we weathered the health crisis.”
On retirement: “I am a friend of Roger Federer and a great fan of tennis. He probably wants me to play a bit more tennis. The last time I played with Roger Federer, I think I won one point in a single set, and maybe I could do a bit better than that. And that would indeed delight me. But as to succession, you may also have noticed that the retirement age has been extended”
Bernard Arnault, LVMH
More from NEWS
After BVLGARI, TAG Heuer CEO also exits, too! (LVMH Watches)
Following the departure of BVLGARI CEO Jean Christoph Babin (as of June 2026), TAG-Heuer CEO Antoine Pin is also exiting …
Soho House – MCR Hotels financing deal uncertain!
Soho House has secured the financing required to keep its $2.6b take-private deal on track after major investor MCR Hotels …
Bankrupt SAKS Global owes LVMH, Kering & Chanel over $220 million
SAKS Global Enterprises’ delayed payments to luxury brands played a key role in accelerating the retailer’s decline and pushing it …
