Company Trend Analysis - Diverse Product Portfolio Gives LVMH Advantage - DEC 2017

BMI View: LVMH has a well-diversified, balanced portfolio of brands across multiple luxury sectors, with no exposure to one specific segment . This gives it an advantage over its peers, able to weather difficult periods across industries with other areas picking up the slack. This is particularly true of its Selective Retailing division, headlined by Sephora and duty free stores, that have grown impressively over the last three years.

LVMH has the most diversified luxury goods product range of any major global company, highlighted by its five divisions: wine & spirits, fashion & leather goods, perfumes & cosmetics, watches & jewellery and selective retailing. It has 70 houses or subsidiaries that operate within these five product categories, including champagne, vodka, cognac, shoes, handbags, perfume, makeup, watches, necklaces and travel retail and beauty retail locations, among many others. The 70 houses represent some of the most revered luxury brands in the world (see table below).

Its fashion & leather goods (34%) and selective retailing (31%) accounted for the two largest portions of LVMH total sales in 2016. Wine & spirits (13%), perfumes & cosmetics (13%) and watches & jewellery (9%) are smaller segments but provide sufficient diversification for LVMH. This distribution has stayed relatively stable over the past five years, with each division representing roughly the same amount of total sales in 2016. Wine & spirits has seen their percentage decline from 15% to 13% since 2012, with selective retailing making up the gains from 28% to 31% over the same time period.

Rapid Growth For Selective Retailing Unit
Revenue By Segment (EURbn)
Source: LVMH

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