Wine and spirits boost LVMH profit

Luxury goods giant LVMH reported a 1% rise in 2011 net profit this week, as the company continues to show strong growth in its wine and spirits division, despite economic uncertainty in Europe.

The group¡¯s net profit topped €3 billion as sales jumped 16% last year, driven mainly by spending in Asia.

¡°I¡¯m going to be a bit repetitive because 2011 was an excellent year like 2010, and like I hope 2012 will be,¡± said chief executive Bernard Arnault.

¡°After an exceptional 2011, LVMH is well-equipped to continue its growth momentum across all divisions in 2012.

¡°Its strategy will remain focused on developing brands through strong innovation, quality and expansion in high potential markets,¡± he added.

The French group¡¯s portfolio includes Champagne brands Dom P¨¦rignon, Krug, Veuve Clicquot and Moët & Chandon, as well as Château d¡¯Yquem in Sauternes, and Château Cheval Blanc in St Emilion.

It also owns Glenmorangie and Ardbeg whiskies, and Belvedere vodka.

LVMH¡¯s robust performance sets high expectations for the luxury goods industry.

¡°It¡¯s somewhat of a paradox to say that 2011 was a year of global prosperity, but we are lucky to export most of our products,¡± Arnault said.

The company¡¯s latest figures show that the European debt crisis hasn¡¯t triggered a slowdown in the US.

In the fourth quarter, sales in Europe rose 3%, but the strongest growth came from the US and Asia, excluding Japan.

Arnault doesn¡¯t see an end to LVMH¡¯s good fortune.

¡°Barring a major accident and despite the difficulties in Europe, the world economy is growing and the world wants more and more of our products,¡± he said.

The company¡¯s fashion division, which includes Louis Vuitton, Bulgari and Dior, also showed strong growth.

LVMH is the world¡¯s largest luxury goods group.