Lvmh Report

LVMH Moet Hennessy Louis Vuitton is an international group of companies engaged in production and sale of luxury goods. The group is active in a number of global markets including wines and spirits, fashion and leather goods, fragrances and cosmetics, jewelry and selective retailing sectors. LVMH operates about 1,859 stores worldwide. LVMH Moet Hennessy Louis Vuitton possesses a portfolio of over 60 premium brands such as Louis Vuitton, Christian Dior and TAG Heuer, which provide it with a competitive advantage.

SBU

LVMH is organised into six divisions, each division functions as an SBU (Strategic Business Unit) with its own General Manager and management team.

Wines and Spirits

LVMH is clearly the world leader in the wine and spirits business. LVMH have a dominant share of 50% built around exclusive brands such as Möet, Chandon and Veuve Clicquot. It has also ventured outside the traditional wine belts in France and Italy to acquire high-end wine producers, California and Australia.

Fashion and Leather Goods

Much of the sales of this division are concentrated in the Asia, particularly Japan. The company had made important acquisitions in this area to fortify its presence. It houses brands such as Fendi, Givency and Donna Karan. Demand for Louis Vuitton products often exceeded supply, requiring customers to go on a waiting list for example, the introduction of the Graffiti line, was generating a waiting list that took over a year to fulfil. The company has been able to influence synergies across its fashion brands. For example, its Kenzo production facility had been transformed to offer men’s ready-to-wear products serving other brands such as Givenchy. Given the low profit margins in the ready-to-wear market, the combination of the above resulted in cost savings aimed to boost profitability. The Louis Vuitton label, combined with the strength of the LVMH group, afforded opportunities for expanding into new brands and which, in turn, helped the...