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Luxury learnings: What to glean from the biggest luxury players’ annual reports

In the ever-evolving world of luxury, staying ahead of the game requires a deep understanding of the industry’s key players and their strategies. As luxury titans, LVMH, Kering, Hermès, and Richemont provide valuable insights into the intricate workings of the luxury market, their annual reports serve as treasure troves of information, revealing the trends, challenges, and successes shaping the luxury industry today.

In this two-part series, we embark on a comprehensive exploration of these  conglomerates, dissecting their reports into the following takeaways. 

LVMH, Richemont, and Hermès defied a global sales slowdown in luxury

Global sales at LVMH for the full-year 2023 grew 13 percent, with the French luxury conglomerate recording organic growth across its business groups except wines and spirits. LVMH recorded double-digit organic growth seen in Europe, Japan and the rest of Asia.

Richemont’s sales for the year ended March 31, 2023 experienced a significant increase of 19 percent at actual exchange rates and 14 percent at constant exchange rates. All regions, distribution channels, and business areas saw sales growth, both at actual and constant exchange rates. Asia Pacific showed a resurgence with a 6 percent increase in sales, while double-digit growth was observed in all other regions, particularly Japan and Europe.

At Hermès, all geographical regions showed strong performance with growth of approximately 20 percent. The sales saw an increase in both the group’s stores (+20 percent) due to high demand and the strengthening of the exclusive distribution network, and in wholesale activities (+24 percent), driven by travel retail. Asia saw robust growth (+19 percent) with significant sales growth in all countries within the region. Japan, too, experienced a consistent increase in sales (+26 percent). 

But for Kering, the owner of Gucci, Saint Laurent and Balenciaga, annual revenues fell 4 percent to EUR 19.6 billion in 2023, following a fourth-quarter sales decline of 6 percent. Revenues from Asia Pacific and Japan, however, registered bright spots for the group as sales grew in these markets. 

Steady revenue from Asia Pacific and Japan 

At all four luxury groups, revenue from Asia Pacific and Japan have mostly held steadily from the previous year, as seen in the graphs below.

LVMH and Kering saw growth in its APAC revenues while Richemont and Hermès saw a slight dip in sales. 

[Note: Richemont’s FY2023 annual report covers the year ended 31 March, 2023; annual reports from LVMH, Kering and Hermès cover the year ended 31 December 2023.]

In Japan, LVMH has maintained revenue from 2020, while Hermès maintained sales at 10 percent. Kering and Richemont sales rose 1 percent and 2 percent, respectively. 

[Note: Richemont’s FY2023 annual report covers the year ended 31 March, 2023; annual reports from LVMH, Kering and Hermès cover the year ended 31 December 2023.]

Top performers

For LVMH, Louis Vuitton and Christian Dior saw a number of highlights in 2023. Vuitton’s womenswear saw continued success thanks to Nicolas Ghesquiere, and the maison welcomed Pharrell Williams as creative director of its menswear. Dior on the other hand saw growth in leather goods and shoes, bolstered by high-profile brand activations around the world, including ‘Carousel of Dreams’ at Saks Fifth Avenue and pop-ups across Asia.

Pharrell Williams at the Louis Vuitton fashion show in Hong Kong. Source: K11 Group

At Kering, Gucci’s revenue for 2023 reached EUR9.9 billion, reflecting a 6 percent decline as reported and a 2 percent decrease on a comparable basis. Sales from the directly operated retail network, which constitute 91 percent of the total revenue, experienced a 2 percent decline on a comparable basis. Similarly, wholesale revenue saw a 5 percent decrease on a comparable basis. 

Gucci was Kering’s top performing brand in 2023 despite a dip in sales. Source: Shutterstock

Saint Laurent was also a strong performer for Kering, particularly in APAC and Japan, while Bottega Veneta saw “encouraging signs” in mainland China.

For Richemont, its jewellery maisons including Buccellati, Cartier, and Van Cleef & Arpels, achieved a 21 percent increase in sales from the previous year, resulting in combined sales of EUR13.4 billion. Buccellati showed solid growth from a smaller base, while Cartier and Van Cleef & Arpels maintained market leadership with significant sales growth and profitability. These maisons also have the highest level of direct engagement with clients within Richemont, reaching 83 percent.

By the end of December 2023, all sectors within Hermès showed strong momentum, particularly ready-to-wear and accessories, watches, and other sectors. The leather goods and saddlery sector experienced a significant increase of 17 percent, driven by high demand. The company’s production capacities are expanding with the addition of four new leather goods workshops in the coming years, aimed to  further strengthen its nine existing centres of expertise located in France.

Brand activations: Hermès put its heritage on display in various forms around the world

With size naturally comes big budgets for various spectacular brand activations, as LVMH and Kering maisons have demonstrated in 2023.

From Dior to Jacquemus, Chanel to Acqua di Parma, prestige brands leaned into hospitality ventures in the form of pop-up and permanent cafes, restaurants, or even hotels to build their brands in different Asian markets. 

The exhibition ‘On the Wings of Hermès’ arrived in Hong Kong in November as a limited showcase. Source: Hermès

Hermès and Richemont opted to promote its heritage and craftsmanship through arts and cultural ventures, such as the Hermès performance exhibition ‘On the Wings of Hermès,’ which travelled to Los Angeles, Hong Kong and Shanghai. Another exhibition, ‘Hermès in the Making,’ celebrated the maison’s artisans, and appeared in Lille, Chicago, and Bangkok in 2023. 

Source: Richemont/Van Cleef & Arpels

Richemont maison Van Cleef & Arpels mounted ‘Van Cleef & Arpels: Time, Nature, Love’ at D Museum in Seoul, in November 2023.

Outlook for 2024 

LVMH’s annual report outlined plans to expand its presence globally, building on its brands’ momentum while remaining vigilant in the current geopolitical and economic context. In 2023 it announced a high-profile partnership with the Olympic Games in Paris, taking place in the summer of 2024.

Kering has been focused on elevating its houses’ visibility and desirability, in addition to selective mergers and acquisitions. In 2024, cultivating exclusivity for its houses, particularly Gucci, is on top of the group’s to-do list. “We are focused on revitalising Gucci, leveraging the unique blend of craftsmanship, Italian heritage, and modernity that characterises this iconic house,” said François-Henri Pinault, chairman and chief executive officer of Kering.

Richemont chairman Johann Rupert identified the group’s digital and sustainability roadmaps as key priorities, along with building brand equity.

Meanwhile Hermès maintains its medium-term objective of achieving ambitious revenue growth and said it is entering 2024 “with confidence,” supported by its integrated artisanal model and well-balanced distribution network. 

Stay tuned for the next installment in this series, coming March 1, where we’ll further explore activity and revenue from LVMH, Kering, Richemont and Hermès’ business groups, as well as their respective investments in sustainability and the future.