With boutiques shut down worldwide and international tourism largely halted, revenue tumbles nearly 40% at the French luxury group
LVMH follows Richemont and Burberry in reporting what analysts expect will be the industry’s worst quarter ever due to the pandemicCustomers in masks queue at a Louis Vuitton shop in Paris, France, May 28 2020. Picture: REUTERS/GONZALO FUENTESLVMH’s customers are curbing purchases of high-end fashion faster than the company can cut costs, and that is hitting the Louis Vuitton owner’s profit.
“LVMH showed relative resilience at the revenue level in the first half of the year,” said Luca Solca, an analyst at Bernstein. “On the profit side, it’s obvious that it’s not been able to slash costs with the same pace as the revenue decline due to the fixed-cost base.” The company reacted “swiftly to the adverse situation”, Guiony said on a call with analysts. “We expect to keep the cost base under control.”Guiony said in an interview with Le Figaro that LVMH still expects to respect the contract signed for its planned purchase of jeweller Tiffany.
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