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SINGAPORE: LVMH Moet Hennessy Louis Vuitton believes that when a crisis hits, it is time to increase investments and not cut back.
LVMH’s chairman and CEO, Bernard Arnault, said quality is even more paramount to customers during a downturn. He added that a crisis is a good time to push their brands even further ahead.
Mr Arnault said: "For instance at Louis Vuitton, even during this period, we never go on sale. When you have a lot of other retailers where you can buy products at 50 per cent off, or even 70 per cent off, we never go on sale.
"Even during tough times we can continue to invest and during the crises I went through the last 20 years, we always gain in market share during crises.
"I think this one we will do the same because when competitors reduce investment, reduce spending, reduce the launch of new products, we use the opening of new boutiques."
LVMH has shown some resilience despite the current tough business conditions. Sales for the first nine months of this year fell by just 0.1 per cent on year - to almost US$17.9 billion.
With Asia, excluding Japan, accounting for some 23 per cent of its revenue during that period, LVMH plans to concentrate its efforts on growing its presence in the region.
Mr Arnault said: "From Asia, the growth is the best in the world so far. I think China maybe around 8-9 per cent growth. We know very well your region, it is a big advantage for us. So we think that growth will be double digit for many years, in our business is in the region.
"Singapore also is expanding. I have seen a lot of projects going on in Singapore. And Singapore is going to attract a lot more visitors from many countries, one being China.
"I think Singapore will be at a crossroad, and I think we grow from that, essentially and we will be part of that."
LVMH owns brands like Louis Vuitton, Christian Dior and Moet et Chandon. Looking ahead, LVMH said it will concentrate on building its existing portfolio of some 60 brands.
However, as consumers become more sophisticated and knowledgeable due to the internet age, the challenge is for the company to constantly come up with more creative and innovative products.
- CNA/sc
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