LVMH Q1 Watch and Jewelry Sales Up 28%

LVMH Moët Hennessy Louis Vuitton reported that sales for its Watches & Jewelry business rose 28 percent to 261 million euros ($371.2 million) for the first quarter of 2011 supported by the “excellent performance” of its own boutiques and its multi-brand retail stores as well as its recent watch introductions.

The company’s watch-making brands revealed their innovations at Baselworld, the world’s largest watch and jewelry trade fair. TAG Heuer strengthened its iconic Carrera collection of chronographs. Zenith, which performed well for the quarter, continued the renovation of its manufacturing facility in Le Locle, Switzerland. Hublot benefited from the strong momentum of its Big Bang and King Power lines and the opening of its own boutiques, most notably Place Vendôme. Chaumet's new Bee My Love collection “was very well received.” And De Beers made “significant progress” in Asia and the United States.

The company said its acquisition of the Italian luxury jewelry house Bulgari was a key highlight of the quarter.


Jewelry and watches weren’t the only quality performers for the period. Overall, the world's leading luxury goods group reported that first quarter 2011 sales increased 17 percent to 5.24 billion euros ($7.38 billion). All of its business divisions recorded strong growth for the period. The United States, Europe and Asia all recorded positive sales increases.

The Paris-based company said that following the earthquake in Japan, an important market, local teams worked hard to bring a gradual return to normal business.

The Wines & Spirits business group posted a 20 percent increase in sales to 762 million euros ($1.08 billion) boosted by strong demand in the U.S. and Asia.

The Fashion & Leather Goods business, home to the company's most prestigious brand, Louis Vuitton, reported a 17 percent sales increase to 20.3 billion euros ($28.85 billion).

Perfumes & Cosmetics sales increased 9 percent to 803 million euros ($1.14 billion) led by traditional and new products from Christian Dior and Guerlain.

The Selective Retailing business segment sales grew 20 percent for the quarter to 1.4 billion euros ($2.02 billion) due to a rise of tourism in Asia. Sephora chain of cosmetic stores continued to do well across regions, increasing its market share.

LVMH said it will continue to focus its efforts on developing its brands and maintaining control over costs. It said it will rely on “the diversification of its businesses and the good geographical balance of its revenues to increase.”

Sotheby’s Revenues Up 63%, Net Loss Improves by 67%

A 1917 painting by Amedeo Modigliani titled “Nude Seated on a Divan” sold for $68.96 million at the Nov. 2 Impressionist and Modern Art Evening Sale at Sotheby’s New York, setting a new a record for the artist’s work. The auction took in a total of $263.7 million.

Sotheby’s on Thursday reported a 63 percent year-over-year increase in revenues to $73.1 million for the third quarter, at least partially due to a $14.1 million, or 48 percent, growth in auction commission revenues from strong worldwide sales. Most notable was the July London Old Master Paintings sale, which brought 85 percent higher results than the prior year. Another contributing factor was a $13.2 million increase in dealer revenues for the period due to a higher level of dealer activity.

Net loss for the third quarter of 2010 is $19.4 million, compared to $57.8 million in the prior period, a 67 percent improvement. The auction house noted that auction sales in the third quarter have historically represented approximately 7 to 10 percent of annual sales, and the third quarter has historically been a loss period.

The auction house did not separate revenues from jewelry sales in its report.

Sotheby’s margin fell from 22.7 percent to 20.2 percent in the third quarter, largely attributable to a greater number of high valued items that were sold in the period, Sotheby’s said. For items of more than $1 million, the buyer’s premium rate decreases from 20 percent to 12 percent.

Operating loss for the period was $29.1 million, a $9.1 million, or 24 percent, improvement from the prior period. The growth in revenues that led to this improvement was partially offset by a $19 million, or 23 percent, increase in expenses in the quarter, ended September 30. A substantial portion of this increase ($14 million) was due to higher dealer costs, which was offset by the increase in dealer revenues. Total expenses, excluding dealer cost of sales, increased 6 percent to $5 million.

“Outstanding auctions in all geographic regions and across nearly all collecting categories have contributed to these excellent results,” said Bill Ruprecht, Sotheby’s president and CEO. “The momentum is strong in the fourth quarter. Among the many successful sales we have had thus far, our Hong Kong series of sales last month was the unquestioned highlight. The series brought $396.4 million, our best total ever and was 55 percent above the previous record series that took place in the spring of this year. Whether in Asia, North America or Europe, there is confidence in the art market as we approach the conclusion of this remarkable year.”

“Confidence was also clearly in evidence this week with our Impressionist and Modern Art sales in New York. Our sales totaled $263.7 million, up from both our May 2010 and November 2009 sales totals,” Ruprecht continued. “Modigliani’s masterpiece, which set a new record at auction when it sold above the pre-sale estimate for $69 million, was Sotheby’s highest price in New York for a work in this category since May 2006.”

On November 30, 20 pieces from the auction of the “Jewels of the Duchess of Windsor,” held at Sotheby’s in 1987, will be offered. The jewelry includes examples of Cartier in collaboration with the Windsors as well as pieces whose inscriptions tell their love story. The combined pre-sale estimate is from $4.5 million to $6.7 million.