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While reporting that first-half net profits at LVMH Moët Hennessy Louis Vuitton soared 49 percent to 396 million euros, or $485.9 million at current exchange, chairman Bernard Arnault took some fresh pot shots at an old rival, saying he harbors no regrets about losing Gucci in a “Looking back, we were fairly fortunate in missing that deal,” Arnault said at an analysts’ meeting here Wednesday in an auditorium at LVMH’s new headquarters. “Of course, we might have proceeded differently [at Gucci]….But now they have unknown designers and inexperienced management. We’ll have to see. It’ll be interesting to watch.”
Evoking gasps and some hearty chuckles, Arnault’s no-confidence vote referred to the appointment of Tom Ford’s underlings to design Gucci and Yves Saint Laurent and to new recruit Robert Polet, formerly head of frozen foods at Unilever, who in July became chief executive of Gucci Group. Polet replaced Domenico De Sole, with whom Arnault had a long-running verbal battle in the fight for control of Gucci that LVMH began in 1999.
Asked for a reaction to Arnault’s comments, a spokesman for PPR retorted, “The Gucci brand is in excellent shape and we understand Mr. Arnault’s frustration — even when expressed by denigrating his competitors.”
LVMH’s results compare with net profits of 265 million euros, or $292.7 million, in the corresponding period a year earlier. Operating income increased 14 percent to 996 million euros, or $1.22 billion, versus 874 million, or $965.4 million in the year-earlier period. Euros have been converted to dollars at average exchange rates for the corresponding periods. At constant exchange, the increase stood at 30 percent.
Sales in the first half, excluding the impact of currency exchange and changes in perimeter, advanced 8 percent to 5.68 billion euros, or $6.97 billion.
Arnault said July and August showed a similar “double-digit” sales trend to that of the first half. Goldman Sachs analyst Jacques-Franck Dossin calculated that amounts to an acceleration in like-for-like sales growth of at least 5 percentage points.
Meanwhile, Arnault reiterated LVMH’s objective of a “significant” increase in operating income for the year.