The mighty LVMH feels the Covid pinch as profits and sales drop off a cliff in the lockdown

The pandemic has brought with it several evils- the most of all for luxury brands. LVMH, for one, reported a drop in sales by 28% during the lockdown. While the company’s wine and spirits business suffered the least, its jewelry and watches vertical was worst hit with a 40% crash in sales compared to the same period last year.

The French marquee stated that its revenues were relatively resilient during the first half of the year, but the profits had another tale to tell. The conglomerate recorded an 84% plunge in net profit to $612.29 million, mostly due to the extended boutique closures during the lockdown.

Commenting on it, LVMH chief financial officer Jean-Jacques Guiony said, “I do not think we have ever seen such a perfectly negative alignment of planets against us,” He further added, “The month of June was significantly better, and July will certainly see some improvement compared to June.” The betterment in sales is attributed to the reopening of shops in China and Europe, however, the lack of tourist sales still remains a concern for the brand.

Hoping for recovery, the company is looking at its expanding e-commerce facilities and the ease of the global lockdown for improving the situation. Remarking on it, Guiony added, “When I see the amount of business that we’ve been able to generate in the last six months on our e-commerce platform, I think there is a future for these platforms to generate a significant amount of the global sales and to be a real and genuine distribution channel, alongside the brick-and-mortar.”

Well, here’s wishing LVMH and the luxury sector a speedy recovery!

[Via: Bloomberg]

Tags from the story