LVMH Revenues Soared in 2023 Despite Economic Challenges

The luxury conglomerate announced a robust earning that has defied market expectations once more.

Feb 18, 2024 | By Sanjeeva Suresh

At the time of reporting, LVMH revenues saw its shares soaring over eight percent after announcing its sales for 2023 that went beyond analyst forecasts and showcased a 13 percent increase in organic growth from 2022, which amounted to USD 93.34 billion in revenue. LVMH saw a 10 percent rise in organic revenue in the fourth quarter alone. In LVMH’s crucial fashion and leather goods sector (which includes brands like Louis Vuitton, Dior, Celine, Givenchy and Loewe) the company saw 14 percent annual growth alongside an 11 percent increase in the perfumes and cosmetics segment. 

It is worth noting that the company’s performance was boosted by sales in Asia, including China, which accounted for 31 percent of the luxury conglomerate’s total sales. LVMH saw its Chinese clientele double since 2019 despite pandemic woes, which led prominent brands in the group to increase their presence in the region. Dior’s Sauvage reaffirmed its status as the world’s top-selling fragrance in 2023. Bernard Arnault, chairman and CEO of LVMH stated “Our performance in 2023 illustrates the exceptional appeal of our Maisons and their ability to spark desire, despite a year affected by economic and geopolitical challenges.”

Let’s break down some of the strategies that led to LVMH’s growth.

The “Kusama Effect”

Louis Vuitton was smart to pick up one of their most successful collaborations. First seen in 2012, Louis Vuitton unveiled a second release to commemorate the 10th anniversary of the collaboration. First teased during the label’s Cruise 2023 show, the collection included the artist’s signature dots and made it across famous Louis Vuitton pieces including the Keepall, Neverfull, Papillon and Speedy. However, it was the sheer scale of marketing that went into the collection that is perhaps the real head-turner. Giant sculptures and installations were erected in front of prominent shopfronts and buildings while ongoing immersive exhibitions drew in a larger demographic of people who essentially did the social media marketing for the collection. Brand recognition was at an all-time high as the signature Yayoi Kusama dots took over social media. While pieces from the collection were already highly coveted, it was once again the brand’s strategy of unveiling everything from keychains to miniature accessories that had a large number of new customers bringing a piece of the collection home.

A is for Ambassador

LVMH did not underestimate the power of a celebrity endorsement, honing in on prominent Thai, Chinese and Korean celebrities to front their campaigns, they essentially tapped into the celebrity’s large fanbase. 2023 saw Hong Kong-born Jackson Wang get appointed as a Louis Vuitton brand ambassador. In January 2023 BTS Member V was confirmed as Celine’s brand ambassador while in December Dior, announced Jay Chou as its latest global brand ambassador, joining the likes of Jimin, Jisoo, and Haerin. At Givenchy, Yu Shuxin was tapped for the role of brand ambassador in China while in Korea, K-pop star Taeyang was chosen. LVMH understands that collaborating with Asian brand ambassadors is as much about fashion and aesthetics as it is about bridging cultural gaps. For instance, while American-based ambassadors like Zendaya or Chloe Moretz may appeal to one demographic, they may not bring legions of loyal fans out for a store opening the way Jackson Wang may do in Hong Kong. It is no coincidence that Louis Vuitton’s first men’s Pre-Fall 2024 collection took place in Hong Kong.

Going For Gold

One thing LVMH understands is the importance of being culturally significant. So when Paris announced that it would be hosting the 2024 Summer Olympic Games, LVMH stepped up to sign a USD 166 million sponsorship deal. The partnership sees LVMH go beyond one-dimensional product-placement-style marketing to having a holistic part to play from the design of the games’ from medals  — by storied Parisian jeweler Chaumet —  to the production of wines and spirits by Moet Hennessy that will be served to guests. Not missing a beat, Fendi and Loewe have released their own Lunar New Year collections to celebrate the year of the dragon, tapping into the local and cultural zeitgeist at a time when mainland China’s luxury market grew by 12 percent last year to more than USD 56.43 billion, according to consulting firm Bain & Company.

LVMH’s success comes despite challenging global conditions, uncertain economic times, and on the back of a global pandemic. The company’s financial resilience is a testament to strategic moves and smart appointments.

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