Specialist
Former CEO within Luxury Fashion Industry
Agenda
- LVMH's (PAR: MC) sales growth outlook – volume and pricing dynamics, category winners and regional expansion opportunities
- Performances comparisons between LVHM, Chanel, Dior (PAR: CDI) and Hermès (PAR: RMS) brands
- Channel mix evolution, highlighting growth in directly operated stores, retail productivity and the online channel
- Operating margin expansion outlook for LVMH’s fashion and leather goods division
Questions
1.
Louis Vuitton sits as a strong performer in the historical performance of LVMH’s fashion and leather goods division. The most recent numbers indicate strong double-digit like-for-like growth in the first nine months of 2021 vs 2019, approaching 40% even. What is driving this strong sales momentum for the fashion and leather goods division and for Louis Vuitton within that?
2.
It sounds as though Dior has outgrown Louis Vuitton in the mix. What are your thoughts there and the drivers behind that?
3.
In the performance outlook, you mentioned that Louis Vuitton has had strong growth partly due to the fact that it represents long-lasting quality and value. As we have a reopening of economies and customers regaining confidence, what is your outline for top-line sales at Louis Vuitton in Q4 2021 vs Q1-3?
4.
How does the readjustment in growth actually shake out?
5.
What do you think is driving this slowdown? Is that demand or is it investment in communication
from the brand or withholding supply?
6.
Is that performance of Louis Vuitton representative of the performance of the broader fashion and
leather goods division in the medium term? Could we expect, for the total division, high single digits to mid-teens organic growth?
7.
You mentioned a normalisation in China, but let’s discuss organic growth across the three key regions,
China, the US and Europe. If we assume Louis Vuitton has mid-to-high single digits to medium double-digit organic growth, what would that be like across these three different regions? What are the drivers there?
8.
You mentioned tourism has not fully returned. How successful do you think Louis Vuitton has been
in stimulating local demand in Europe?
9.
What do you think the split will be in local customers vs international customers for Louis Vuitton and how does that differ to pre-coronavirus levels?
10.
We’re hearing a lot about the growth in menswear under the direction of Virgil Abloh. What is your outlook for the mix in men’s vs women’s at Louis Vuitton?
11.
You mentioned that the leather goods division is optimised for Louis Vuitton, but perhaps in womenswear, there are further opportunities to optimise the collection. What are the optimisation opportunities for Louis Vuitton by category?
12.
Do you have a sense of the sales mix given the different growth profiles of categories for the Louis Vuitton brand?
13.
If leather goods is around 70-75% for the Louis Vuitton brand today, what might that be in 3-4 years’ time, given the opportunity in soft accessories and potentially in ready-to-wear?
14.
What is the cadence of newness at Louis Vuitton? It appears, at least in other conversations, that perhaps this is the strength of the brand. How does that compare to other luxury brands such as Chanel, Dior or Hermès?
15.
Do you think there is more newness from Louis Vuitton in leather goods vs other brands, or is it in line?
16.
Which of Louis Vuitton vs Hermès do you think is outgrowing the other and why?
17.
Do you think the outperformance of Hermès is likely to continue as the brand grows in size?
18.
We spoke about the performance, with Dior outgrowing Louis Vuitton in the fashion and leather goods division. What does this mean with regards to cannibalisation? Do you think there is a threat that Dior cannibalises Louis Vuitton in sales?
19.
You mentioned strong growth for Dior in China, but what about the backlash in China for marketing and image? Do we think that there’s any effect for the Dior brand?
20.
Prices have increased across the luxury landscape in 2020-21. What price increases have you noted to date at Louis Vuitton in 2021 by category?
21.
Do you have a sense for how ASP or AOVs compare at Louis Vuitton vs brands such as Hermès, Dior or Chanel?
22.
Is there scope for Louis Vuitton to move into the higher price category, similar to Hermès?
23.
If we take the offline channel, how well distributed is Louis Vuitton in store count?
24.
What would be a rough sales per square metre for Louis Vuitton? Do you have an idea of a rough, ballpark figure?
25.
Why do you think Hermès is winning? Is it simply the price point or are there other factors to consider?
26.
What do you consider to be the major improvement opportunities for Louis Vuitton in sales per square metre?
27.
What is your best estimate for online sales relative to total sales at Louis Vuitton?
28.
You mentioned product availability. How does the product availability differ for Louis Vuitton vs its
competitors online? Which products are typically available vs not available?
29.
Do you anticipate that the online sales penetration will stabilise around 10-12%? Might we expect a small increase? What is your outlook there?
30.
What is the approach to third-party online? Obviously, Louis Vuitton is not present on platforms such as Farfetch. Do you expect a future where the company utilises this type of platform?
31.
What is the shift in online and offline and how does this impact margins? What is the margin opportunity for brand.com, the Louisvuitton.com vs directly owned stores?
32.
How sustainable are the current 40% operating margins for fashion and leather? I think they even reached 41% historically.
33.
We’ve spoken about a lot of competitors in the market, but who do you think has the potential to be the next Louis Vuitton?
34.
Do you have any brands in mind when you think about the next tier? Are there any potential specific
brands, even if they are many years off?
