Louis Vuitton 2004 Annual Report Download - page 14

12
Interview with Antonio Belloni,
Group Managing Director
2004
Highlights
Moët Flower: a box
containing a bottle
of Brut Impérial, four
delicate flute glasses
in the shape of red tulips
and an oblong “frog”
to support them. You can
plant these ever-blooming
tulips in the center of a
table, in a garden, on your
balcony … get them now.
Limited collection, on sale
until September 2005.
With gains in market share, the recovery
of loss-generating activities, a reduction
in debt, LVMH has reached the objecti-
ves set two years ago. Would you like to
comment on this?
Antonio Belloni : First, I would like to
recognize the talent and responsiveness
of our people. It is the commitment of
our employees that allowed us to keep
our promises. And the work is not yet
finished; we still have progress to make
and a large number of opportunities for
value creation. For instance, our fashion
brands, such as Fendi or Donna Karan,
are well on track and our teams will also
win that bet. Our group--and this is one
of its assets-- does not have a centrali-
zation culture. Our entrepreneurial orga-
nization, in which creativity is a cardinal
virtue, allows everyone, including those
working in the field, to become involved
and act effectively within the framework
of a strategy that has been defined and
communicated. In terms of management,
this strategy focuses on cash generation
and is based on strict discipline in the
choice of our investments.
How do you determine these selective
investments?
A.B. : The nature of our investments
clearly illustrates our desire to allocate
resources primarily to the brands and
markets that offer the best prospects for
a quick return. At the same time, we have
to nourish the more long-term develop-
ment of our growth drivers, our “rising
stars”, and the markets that are just disco-
vering luxury, such as China and India.
This demands a constant search for the
best balance and requires certain choi-
ces. This is a rigorous exercise and I believe
that we master well its complexity. Our
efforts are primarily dedicated to the
expansion of our store network, espe-
cially for Louis Vuitton and the other
brands in their highest potential markets.
DFS also made an exceptional investment
in 2004, opening a Galleria in Okinawa
that offers very promising prospects,
given the success of earlier airport stores.
We continue to invest in communication.
The image of our brands is a priceless
asset that we must continually update
and enrich. Communication is also an
essential component of the success of our
new products and of the permanent
popularity of our best sellers.
In terms of external growth, LVMH
has just bought Glenmorangie. What
is the purpose of this investment?
A.B. : This acquisition is perfectly inte-
grated in the value-creation strategy of
the Wines and Spirits business group. In
a market where growth clearly works to
the benefit of strong brands and pre-
mium segments with high margins, Moët
Hennessy has just enriched its portfolio
with a brand of exceptional quality and
reputation, a brand that features one of
the largest and most prestigious product
lines in its class, and a brand that has
posted strong steady growth for ten
years. Glenmorangie, the leader in the
United Kingdom in volume and value,
offers excellent prospects for internatio-
nal expansion. The support from our
Group will both accelerate its growth
and increase its profitability.