Louis Vuitton 2002 Annual Report Download - page 62

LVMH IS PRESENT IN THE PERFUMES AND COSMETICS SECTOR THROUGH
THE GREAT FRENCH HOUSES CHRISTIAN DIOR, GUERLAIN, GIVENCHY
AND KENZO. THIS GROUP OF GLOBALLY ESTABLISHED BRANDS IS COMPLETED
BY A SET OF YOUNG COSMETICS COMPANIES THAT TARGET A NEW CUSTOMER
CATEGORY—BENEFIT, FRESH AND BLISS IN THE UNITED STATES PLUS MAKE
UP FOR EVER, A FRENCH BRAND THAT SPECIALIZES IN PROFESSIONAL
MAKE-UP PRODUCTS. IN ADDITION, THE GROUP RECENTLY BEGAN TO
LICENSE THE PERFUMES OF DESIGNERS MICHAEL KORS, MARC JACOBS
AND KENNETH COLE IN THE UNITED STATES. LVMH ALSO HOLDS A 50%
EQUITY STAKE IN ITALY’S ACQUA DI PARMA.
PASSIONATE ABOUT CREATIVITY PERFUM ES AND COSM ETICS
EXCEPTIONAL GROWTH DRIVEN BY INNOVATION
AND SUSTAINED BY GREAT CLASSICS
STRATEGY AND OBJECTIVES.
Interview with Patrick Choël, President of the Perfumes and Cosmetics business group
60 •61 ANNUAL REPORT 2002
WHAT WILL YOU
REMEMBER FROM 2002?
PATRICK CHOËL: We are
pleased t o have achieved
our objectives under
difficult economic and
monetary circumstances.
Estimates for growth
in the global market
for selective perfumes
in 2002 is 3% . We
post ed organic growth
of 6% , double the
market average. For the
fourth consecutive yea r,
we confirmed our excep-
tional energy in our
competitive environ-
ment. In addition, we
boosted our profitability
and improved cash flow.
INWHAT REGIONS OF THE
WORLD DID YOU RECORD
THE BEST PERFORMANCE?
P. C.: In Europe, where
we continued to expand,
and in Asia , where our
brands accelerated their
growth. In Japan, for
example, sales were up
10% in yen. Conversely,
our growt h was slowed
in the United States in
2002 by the persistence
of challenging business
conditions and diffi-
culties encountered by
the department stores.
ONTHE GEOGRAPHIC
LEVEL, WHERE ARE THE
MAIN GROWTH DRIVERS?
P. C.: We have seen
strong growth in Russia ,
China and Korea, for
example. In these coun-
tries, where t he selective
retailing market is st ill
quite sma ll, the luxur y
brands have a growing
appeal. Names like Dior
make custom ers drea m,
as they do everywhere in
the world, a nd will beco-
me increasingly affor-
dable over time. This of-
fers us excellent growt h
prospects. The Chinese
select ive market is
growing 30% a year and
the Korean market has
doubled in the past
three yea rs. LVMH’s
brands are already
firmly established in
these markets. Right
now, they are holding
their own, a nd are well
positioned to continue
winning market share.
IDEALLY, WHAT CONTRIBU-
TION DO YOU NEED FROM
NEW PRODUCTS TO ACHIE-
VE BALANCED GROWTH?
P. C.: Innovation is one
of our priorities. We stri-
ve t o offer more than
20% in new products
each yea r. But t ogether
with t hese new creations,
we are fortunate to have
a unique palette of great
classics, some of which
have an exceptional aura
and extraordina r y longe-
vit y. We support them
and their performances
do not disappoint.
Consumers a re some-
times confused by the
plethora of new, some-
times redunda nt, pro-
ducts launched on the
market. Thus, it is very
important to be able to
count on our blue chip
brands. Our strategy is
to offer real innovations
that bring added value
and creat e a difference
in the eyes of consumers,
while continuing t o
crea te value for our
existing lines.
HOW DO YOU PLAN TO
APPROACH 2003?
P. C.: We have set
objectives that are just
as ambitious as in
previous years. Our
growth will be ca rried,
in particula r, by a ver y
high rate of innovation
in perfumes, skincare
and make-up.