It Sees The Pandemic Ending And Hopes Geopolitical Tensions Won't affect It

LVMH Moët Hennessy Louis Vuitton, wants to scale up manufacturing in France, with two new sites set to open by the end of the year.

"We are at the end – I hope - of an economic crisis, I hope a geopolitical crisis won't reach us - but we've managed to get through this crisis in a stronger position," said Bernard Arnault, when outlining plans to increase the number of sites before the end of the year and bringing LVMH's total sites to 20 in France.

  • The luxury group's sales, as well as those of its rivals Kering and Richemont, have risen dramatically as a result of rising demand for European fashion and accessories
  • Last year, according to French President Emmanuel Macron, the fashion and luxury industries surged to become the country's largest exporter

Passing-On Price Increases

The leading fashion brand in the LVMH luxury empire, Louis Vuitton, stated last week that it is boosting prices in response to rising manufacturing costs and worldwide inflation, a move that will effect the pricing of Louis Vuitton leather products, accessories, and fragrances around the world.

In a statement to Reuters, Louis Vuitton said, "The price adjustment takes into account changes in production costs, raw materials, transportation, as well as inflation".

  • Since the outbreak of the pandemic, several well-known fashion firms, including Hermès and Chanel, have raised prices to protect margins from inflation
  • While Chanel hiked the price of some of her classic handbags three times last year, LVMH chairman and CEO Bernard Arnault believes that luxury businesses should know their boundaries

The 72-year-old billionaire stated in his 2021 earnings call that demand for luxury products would continue to be strong this year, but that brands must take a strategic approach to the inflationary situation and said that its brands should remain reasonable when assessing price hikes.

Disclaimer

Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.

Credits

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