"LVMH showed exceptional resilience to the serious health crisis the world experienced in the first half of 2020," insisted Chairman and CEO Bernard Arnault. "Our maisons have shown remarkable agility in implementing measures to adapt their costs and accelerate the growth of online sales. While we have observed strong signs of an upturn in activity since June, we remain very vigilant for the rest of the year."
According to Arnault, LVMH continues to be driven by a long-term vision, a deep sense of responsibility and a strong commitment to environmental protection, inclusion and solidarity.
"In the current context, we remain even more firmly dedicated to showing continuous progress in these areas," he said. "Thanks to the strength of our brands and the responsiveness of our organization, we are confident that LVMH is in an excellent position to take advantage of the recovery, which we hope will be confirmed in the second half of the year, and to strengthen our lead in the global luxury market in 2020.”
Still, it will be a long road back. For the six months, net profits plunged 84%. LVMH's travel-retail business suffered the most, reporting a loss of about $315 million. Meanwhile, sales of perfume and cosmetics tumbled 40%, as retailers closed doors around the world to combat the pandemic. Yet, LVMH is going ahead with expansion plans in the second half; for example, Fresh will open concept stores in China with new services, and Loewe will launch a line of home fragrances.
Overall, LVMH, which owns 75 brands ranging from Dom Pérignon Champagne to Bulgari jewelry, reported that sales fell 38% in Q2, following a 15% drop in the first quarter. In organic terms, sales were also down 38%, beating the Bloomberg consensus forecast for a 42% fall. Organic sales in the second quarter were down 54% in Europe and Japan, while the U.S. saw a 39%drop. Asia, excluding Japan, performed comparatively better, with a 13% decline.