A Presentation on the luxury

fashion Conglomerate – LVMH

By:
Nitesh Srivastava
Sanchayeeta Choudhary
Surbhi Modi
Vishakha Negi
 LVMH Moët Hennessy • Louis Vuitton S.A. (LVMH), is
a French holding company and one of the world's largest
luxury goods conglomerates. It is the parent of around 60
sub-companies that each manage a small number of
prestigious brands.
 The group was formed after mergers brought together
champagne producer Moët et Chandon and Hennessy, a
leading manufacturer of cognac. In 1987, they merged with
fashion house Louis Vuitton to form the current group.
 The group is partly owned by the Christian Dior group, and
Bernard Arnault is Chairman and CEO of both companies.
 To represent the most refined qualities of Western "Art de
Vivre" around the world.
 In view of this mission, five priorities reflect the fundamental
values shared by all Group stakeholders:
- Be creative and innovate
- Aim for product excellence
- Bolster the image of their brands with passionate
  determination
- Act as entrepreneurs
- Strive to be the best in all they do
 In 1743, one of the descendants of the
nobles Moët brothers, Claude Moët,
founded the Maison Moët.
 His grandson, Jean Rémy Moët,
transformed this trading company into
the world's leading luxury brand which,
has been the veritable embodiment,
around the world, of the genius of
champagne.
 Moët & Chandon is still, and more than
ever before, the symbol of pleasure,
grandeur and pure celebration.
 LVMH held 40% of the cognac market
and 20% to 25% the overall
champagne market.
 Louis Vuitton, a trunk-maker in Paris since
1854, became a legend in the art of travel
by creating luggage, bags and accessories
as innovative as they were elegant and
practical.
 A century and a half later, the legend is
embodied by the Monogram canvas, and
played a starring role in the development of
modern luxury.
 Louis Vuitton is now active in other creative
spheres like: ready-to-wear, shoes, watches,
jewellery.
 Under the artistic direction of Marc Jacobs,
the new collections met with immediate
success and renown.
 60% of sales in this division are
concentrated in the Asia-pacific region.
 Innovation – The House
Christian Dior's designs dresses, creates
perfumes and invents make-up looks for
women.
 Sexy – Make-Up
Dior created the "Looks", complete ranges of
products evolving as seasons go by. Each year,
new collections offer daring creative and
vibrant shades.
 Beauty – Skincare
Dior set up its own research laboratory: Dior
Science. At the Innovation Centre, 200 experts
work each day to create and develop more and
more efficient products.
 Dream – Fragrance
There is a Dior fragrance to suit each woman,
whether she is sophisticated, sensual, natural
or elegant… Daring as well as floral, Dior
fragrances all express a state of mind, a way of
life.
 From a small workshop in the
Swiss Jura mountains, TAG Heuer
has transformed into a watch
making legend. Recognized
throughout the world for its luxury
sports watches and pioneering
work in chronographs .

 TAG Heuer watches epitomize

prestige and performance and
brilliantly fuse technology with
design.
 DFS Group Limited is the world's
leading luxury retailer catering to
the travelling public.
 Its strength lies in its strategic
brand partnerships, groundbreaking
store and product development,
superior assortments, and targeted
marketing programs.
 DFS covers the world, employing
more than 6000 people in its
offices, DFS Gallerias, airport shops,
and other stores.
•Groupe Les Echos has several
business, finance, arts, culture
publications:
Les Echos
Investir
Investir Magazine
Investir.fr
Capital Finance
Radio Classique
Connaissance des Arts
CLASSICA
Le Salon des Entrepreneurs
Les Echos Conférences
Les Echos Formations
Les Echos Editions
Les Echos Institut
 LVMH draws an estimated 80% of its profits from
Vuitton, thus propping up less-successful units,
from the DFS duty-free retail chain to couturiers
Christian Lacroix and Givenchy.
 Their wine/spirits unit possessed the number one
champagne/cognac, and even more importantly,
the unit shows signs of a growing market.
 Their fashion/leather goods outpaced many of their
key rivals.
 The perfume/cosmetic unit witnessed an increase
in growth rate, and led to an opportunity for LVMH
but they were only ranked #7 in the industry,
giving them something to work to improve.
 Parfums Christian Dior, demonstrating its
exceptional image and its roots in the world of
couture, once again outperformed its competitors.
 Fendi had continued the growth
curve experienced in 2007 and that
the Marc Jacobs, Donna Karan,
Kenzo, Pucci and Loewe labels had
all performed strongly.
 Chaumet, the prestige jeweler on
Place Vendôme in Paris, continues
its targeted global expansion. Fred
enhances its identity as a
contemporary jewelry designer and
De Beers affirms its positioning as a
diamond jeweler.
The famous luxury brands LVMH controls:
 Champagne, Wine, Cognac, And Brandy
Moet & Chandon
 Dom Perignon
 Hennessey
 Fashion
 Berluti
 Christian Lacroix
 Givenchy
 Louis Vuitton
 Donna Karan
 Fragrances
 Christian Dior
 Givenchy
 Cosmetics
 Hard Candy
 Fresh
 Urban Decay
 Watche
 Ebel
 Tag Heuer
 LVMH Chairman Bernard Arnault, it has already quintupled sales
and increased margins sixfold since he bought the company in
1989.
 LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury
products group, recorded revenue of €7.8 billion in the first half of
2009, reflecting a slight increase over the same period in 2008
despite the crisis and a high comparable.
 Profit from recurring operations came to €1,363 million. It
increased tangibly in the brands that control their distribution, like,
for example, Louis Vuitton.
 But the real winner of the quarter was the watches and jewelry
group , which posted 12% revenue gains over the year-earlier
period. Strength came from brands including TAG Heuer, Zenith
and the Christal collection from Dior. The company added that
Chaumet and De Beers also continued their retail expansion plans
and increased revenues.
 Their products, and the cultural values they embody,
blend tradition and innovation, and kindle dream and
fantasy.
 What makes Vuitton unique, in fact, what makes the
most profitable luxury brand on the planet is the
relentless focus on quality.
 There's the rigidly controlled distribution network.
 Jacobs' fresh, unfussy aesthetic was a perfect fit, and
the new ready-to-wear and shoe lines that he has
introduced draw younger customers in the door.
 Jacobs teamed up with Japanese artist Takashi
Murakami on a multicolored line of bags,
incorporating images like cherry blossoms and eyes
into the traditional LV monogram and adding shiny
metal trim.
 They have some elements that are striking, while
retain the history.
 LVMH produced products that nobody needed, but
that were desired by millions across the world.
 In order to achieve long-term success, LVMH
decided it would best be achieved through artistic
creativity, technological innovation, and attention
to detail. Image meant priceless and irreplaceable.
 There are five main aspects to the strategy of
LVMH, they are product quality, innovation, image,
craftsmanship/production process, and risk
tolerance.
 Louis Vuitton is also selling a certain idea of
France… a brand that represents a mythical
France, one of which neither the French nor the
outside world can get enough.
 The theme of the last Louis Vuitton fashion show
—"Girl with the Monogram handbag"—has the
colors and textures inspired by Vermeer and the
golden age of Dutch painting.
 Vuitton must build sales in the U.S. while
tapping into rising affluence in China and
India.
 Vuitton tried to outpace its rivals as it
carefully opened boutiques around the
world. Arnault is especially pleased that
the U.S. stores, which once posted 75% of
their sales to Japanese tourists, now are
thronged with local shoppers who account
for 85% of sales.
 That's helping Vuitton reduce its risky
dependence on Japanese customers.
Vuitton's sales in Japan grew 12% last
year -- respectable, but lower than
companywide sales growth.
 LVMH recently launched its watch &
jewellery division in India. TAG Heuer and
Christian Dior, two of the group's star
brands, will herald their entry into the
country, said to be an extremely
important and promising market for them.
 China has become the biggest market for Hennessy
cognac and is the second largest customer base for Louis
Vuitton worldwide.
 The Group’s more recent moves are also very promising.
Glenmorangie and Benefit have been hugely successful in
Asia, Sephora in Eastern Europe, Marc Jacobs in Europe,
Hennessy in Vietnam etc.
Japan:
 Must win market.(Triad)
 They are big buyers of luxury brands.
 Japan accounts for 33% of fashion and leather
category.
 20% of Christian Diors sale is from Japan
 The brand image is everything in Japan were there
is little difference between the rich and the poor.
 Large percentage of single, working women.
China:
 Has a huge population.
 Growth rate of 8% and negative inflation rate.
 Policies of the govt are favourable for luxury
brands.
 Annual growth rate of premium cosmetic market
was a significant 30%.
 Yes , if the purchasing power of the new
middle class increases then it is good for
LVMH as the customers who can afford it
increases .
 But LVMH should reach this market segment
without tarnishing its brand.
 They should not decrease the price of their
products.
 Maintain only exclusive shore rooms.
 With their other business acquisitions,
LVMH was able to pick up print
publications, newsletters, a radio
network, an advertising company,
press agency, and Internet sites.
 Think Louis Vuitton, and what comes to
mind is most likely, it's those glossy
ads -- the ones with supermodels
draping their lithe frames over Vuitton
luggage against a striking gold-and-
turquoise desert landscape. Or the
crowd of Hollywood celebs,
fashionistas, and even Rudy Giuliani,
partying at a champagne-soaked 150th
birthday party for Vuitton in a tent next
to Lincoln Center in New York. Or the
sleek new Vuitton retail temples, from
Fifth Avenue to Tokyo's fashionable
Omotesando district, where shoppers
plunk down $1,000 and up for a
handbag in the new Murakami line.
 Vuitton trades brilliantly in the stuff of
desire and ego.
 LVMH has all advertising done by the design team, as
opposed to the marketing team. This is in effort to keep
proximity between the product and its message.
Craftsmanship and the production process are carefully
planned out each step of the way.
 Louis Vuitton does an excellent job in advertising, public
relations and celebrity events to create their luxurious
and exclusive image, and the actual experience with
store outlook and interior decoration, product and
prestige feeling are synchronized with customer
expectations and echoed through Louis Vuitton’s brand
values.
 Louis Vuitton has come with a new advertising strategy
& is the first fashion company to found its own
architecture group, which the label hopes will spread a
"glowing image" throughout the world. Vuitton is not
prepared to reveal the exact costs of its architecture
project, but the Wall Street Journal estimates that each
building will cost about ten million euros.
 The Louis Vuitton Moët Hennessy (LVMH ) Watch and
Jewellery account has finally found its media house in
India, Starcom MediaVest.
 LVMH has named a small New York interactive
advertising shop, Morpheus Media, as its agency of
record for all of its United States online marketing
strategy and execution across its brands.
 LVMH consolidated Middle East media brief to Dubai-
based OMD Strategies, a dedicated unit created by
OMD and its Paris-based strategic partner, Strategies
International.
 LVMH has awarded the public relations and
strategy planning accounts for flagship cognac
brand Hennessy VSOP and champagne Moët et
Chandon to be handled jointly by the two agencies,
while Proximity Live will manage Moët et Chandon
and fellow champagne Dom Perignon. Fleishman-
Hillard is set to look after several of the wine brands.
 Louis Vuitton Moet Hennessy is talking to advertising
networks about the global creative account for its
Hennessy Cognac brand. Advertising for the brand has
been sporadic in the past but LVMH is said to want to
increase activity. Hennessy's advertising, which is currently
confined to press work, is produced in-house.
 LVMH's agencies include Rainey Kelley Campbell
Roalfe/Y&R, which handles creative for Moet & Chandon
Champagne, and Euro RSCG Wnek Gosper, which produces
work for Louis Vuitton accessories. Carat handles LVMH's
pounds 60 million pan-European media account.
 Louis Vuitton, which received its own TV
commercial this quarter, in addition to recently
inking a deal to have Rolling Stones' guitarist
Keith Richards star in its current print campaign.
 Internationally-renowned actress and director
Sophie Marceau is the star of the new Chaumet
advertising campaign, the story of an encounter
with love entitled "L'Empire des sentiments".
 A magical perfume, an exceptional casting:
Charlize Theron, one of Hollywood's most famous
stars is the face of the perfume J’adore.
 TAG Heuer once again explores exciting creative
territory with a skillful staging of the core values
for the new season: force and beauty. Everything
resides in the inimitable looks of this singular
team of ambassadors… Tiger Woods and the
mythic Link series, Maria Sharapova and the TAG
Heuer Formula 1 Diamonds, or Kimi Räikkönen
and the the Carrera models.
 DKNY Jeans taps street style pioneer for new ad campaign
by calling on photographer Scott Schuman, aka The
Sartorialist, to shoot the Spring/Summer 2009 ad campaign
for DKNY Jeans.
 The new Louis Vuitton Fall/Winter 2007-2008 ad campaign
is all about feminine sensuality, infused with 1950’s
Hollywood glamour. Gorgeously shot by photographers Mert
Alas and Marcus Piggott, Scarlett Johansson incarnates the
ultimate femme fatale with her platinum blond hair and
languorous poses.
 Luxury watch brand Tag Heuer is looking at qualitative
development than a quantitative one. To achieve that, LVMH
Watch & Jewellery International plans to allocate a key part
of its investment to focus on advertising and building the
brand in India.
 The unstoppable Kate Moss is more
gorgeous than ever in her latest ad
campaign, for Fred Joaillier, the
Parisian jeweler established in 1936
and now part of LVMH. The ad shot in
beautiful black and white by famed
photographer Patrick Demarchelier,
shows Kate at her most classic
sporting a small fortune in diamonds.
 Louis Vuitton's upcoming spring
advertising campaign features a
bronzed Gisele Bundchen lounging
poolside at a private home called
Palacio de Salomon in Ibiza, Spain.
 As an encore to this past spring, LVMH has
brilliantly combined three powerful iconic
visionaries of our time to create this wonderfully
artistic new series for the Persian fashion house. 
The Queen herself, Madonna, photographer
extraordinaire, Steven Meisel, and design
luminary, Marc Jacobs have mixed beyond
beautifully to create fashion porn in this exquisite
ad campaign. 
 While Marc Jacobs’ ad
campaign collaborations
with Juergen Teller have
inspired cult fans to look
beyond the typical
product-placements and
see the Marc Jacobs
world from the indie
perspective he lives
within, the Dolce &
Gabbana ad campaigns
create the very concept
of provocation that the
designers take
inspiration from.
 While most luxury groups cut their ad budgets in
2003 Vuitton boosted spending an estimated
20%, including a global campaign featuring
Jennifer Lopez. In 2004’s campaign, shot in the
Dubai desert, featured supermodels including
Naomi Campbell and Kate Moss.
 Vuitton's advertising strategy used to be modest,
too modest. Now they've taken it to a new level.
Even so, Vuitton is so big that analysts reckon it
spends only about 5% of revenues on advertising,
half the industry average.
 Advertising Age estimated global measured
advertising expenditure of $584m in 2007,
making LVMH the world's #61 advertiser.
 Brazilian Supermodel Gisele Bundchen
Becomes New Face For Louis Vuitton as
Luxury Brand Expands in China.
 First there was Jennifer Lopez, Scarlett
Johansson, Diane Kruger, Christina Ricci
and Chloe Sevigny. For the past two
years, actress Uma Thurman was it.
 NBA Star Yao Ming, Superstar Sushmita
Sen, Priyanka Chopra, Shahrukh Khan &
Tiger Woods joins TAG Heuer as Global
Brand Ambassador.
 As Vuitton expands, other hazards appear. Counterfeiting has risen sharply in
the past five years, largely because of China. Interestingly, Chinese spurn the
fake bags, which are mainly exported to Europe and the U.S. or sold to
tourists. Pressed by Vuitton, Chinese authorities closed one factory last July in
Guangzhou.
 Another menace would be the departure of key personnel. Early in 2004,
there was speculation that Jacobs might leave unless LVMH gave more
backing to his clothing line. But his contract ran until 2008, and Arnault has
been singling out Jacobs' label as a rising star in LVMH's portfolio.
 For Vuitton, the biggest challenge may be to keep this powerful machine
under control. The company opened 18 stores last year, about twice the rate
of store openings a decade ago.
 Vuitton markets itself as an arbiter of style, it needs to keep convincing
customers that they're members of an exclusive club.
Gucci
 Well entrenched player in Europe and North America.
 Gucci originally started as a reseller of luggage imported from Germany.
 As of 2003, Gucci Group had 348 directly operated stores.
Richemont
 It was the second-largest luxury goods company in the world.
 Major player in Jewellery and Watches.
 Sales of watches and Jewellery accounted for 70% of total luxury
products sales in 2000.
Hermes
 Relied on single-branded strategy.
 Products mainly clothing , fragrance and leather accessories.
 Japan accounted for 25% of its sales in 2000.
Bulgari :
 It operated in seven luxury segments including watches, perfumes,
jewellery etc.
 Substantial part of its revenue was from watches and jewellery
 Customers were mostly first time buyers.
 Asia pacific accounted for 36% of its sales.