Luxury Headlines – 23/01/2024
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Former CEO of Louis Vuitton Appointed Head of LVMH Fashion Group
Michael Burke, the former CEO and chairman of Louis Vuitton, will succeed Sidney Toledano in leading LVMH’s fashion brands in his new position as CEO of LVMH Fashion Brands, effective February 1. Burke has been working with Bernard Arnault for 40 years and has managed to nearly triple revenues at Louis Vuitton during his 10 years in charge of the brand, from €7.1 billion in 2013 to €20.6 billion in 2022. Some of Burke’s first tasks will be finding a new creative director for Givenchy and positioning Celine to reach €3 billion in annual sales after passing the €2 billion mark in 2022. Burke is assuming this new position in a problematic macro-environment, during which the division grew by only 9% in Q3 2023 compared to 21% in Q2 and 18% in Q1.
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L’Oréal Invests in Biotech Company Focused on Longevity
L’Oréal’s venture capital division, BOLD (Business Opportunities from L’Oréal Development), announced it will participate in the $66 million Series D funding round of Swiss consumer health company Timeline alongside Nestlé. Timeline has launched a proprietary technology called Mitopure, which focuses on aging and longevity and specializes in supplements and topical skincare products. With this funding, Timeline aims to expand across the food, beauty, and health sectors. Longevity biotech is becoming more popular within beauty, with companies like Estée Lauder launching a new skin longevity platform in December 2023.
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Richemont Reports Strong Growth in China and the US
Due to strong performances in China and the US, Richemont’s revenues have grown by 8% year-over-year, reaching €5.6 billion, above the forecasted 7%. Many brands have suffered from the luxury slowdown, which saw a disappointing holiday demand and left companies sitting on a lot of stock. APAC was up 13%, with China, Hong Kong, and Macau underpinning this growth with a 25% year-over-year increase, while Japan also contributed an 18% year-over-year increase. The US grew by 8% despite the current macroeconomic challenges, which have impacted many brands. By category, jewelry was up 12%, exceeding expectations, and specialist watchmakers were up 3%. The division categorized as “Other”, which includes Chloé and Montblanc, saw a 1% decline due to lower wholesale and online retail sales. Chloé recently appointed a new CEO and a new creative director. Richemont’s goal is still to sell struggling e-tailer Yoox-Net-a-Porter.
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De Beers Cuts Diamond Prices to Boost Sales
To increase demand for its products, De Beers, the world’s top producer of gems, has significantly reduced the price of its diamonds, with price reductions of 10% across all products. The most significant cuts have been seen in the 2 to 4-carat category, with prices reduced by up to 25%. The industry experienced a crisis in the second half of 2023 with sizeable downward pressure on prices due to a macroeconomic-induced pullback in demand, preceded by a post-COVID surge in demand. At the time, two of the biggest mining companies stopped supplying the industry to avoid further downward pressure on prices.
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Lamborghini Sets Sales Record of More than 10,000 Vehicles
Lamborghini set a new sales record in 2023, delivering 10,112 vehicles, a 10% increase in volume compared to last year. The US, with 3,000 cars delivered, is the number one market for the company. However, by region, EMEA saw the most significant uptick with 14% growth, followed by the Americas with 9% growth and APAC with 4% growth. By model, the Urus was the best-selling model in 2023 with 6,087 units, followed by the Huracan with 3,962 units. Lamborghini will discontinue some of its models, including the Aventador, and invest in developing Electric Vehicles (EV) as part of its ecological transition. The company announced it will invest an estimated €2 billion in developing new EV models and decarbonizing its entire value chain. Its first hybrid sports car, the Revuelto, has already received orders through 2026.
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