Louis Vuitton 2004 Annual Report Download - page 8

Our teams within the Selective Retailing and Watches & Jewelry companies are keeping
their promises. By adapting its business model to the new realities of global tourism,
DFS has increased market share. Sephora is strengthening its position as the most
innovative brand within the selective retailing segment of perfumes and cosmetics.
Our watches business group, which was unprofitable two years ago, resumed profita-
bility in 2004 with a growth rate markedly higher than for the market as a whole. The
performance turn-around within these two business groups is testament to LVMH’s
strong reactivity and its ability to instigate and achieve ambitious objectives.
2005: A NEW YEAR OF GROWTH
We are not about to lower our sights after such strong progress. LVMH is in an excel-
lent position to pursue growth while actively managing its portfolio of brands. We are
keeping the bar high for our strategy of profitable growth with particular focus on our
leading and ‘rising star’ brands. As a result, we are setting an objective of another
tangible increase in operating income in 2005, higher than sales, against the back-
drop of challenging exchange rates.
This will be a dynamic year: sales growth will be driven by an acceleration in new
product development, by the expansion of our retail network and by considerable
investment in marketing. Louis Vuitton will launch two new lines of leather goods
whose success is already exceptional: Monogram Cerise, which sees the continued colla-
boration of Marc Jacobs and Takashi Murakami, and Denim; Parfums Christian Dior
will launch two new fragrances during the year; TAG Heuer will launch a new auto-
matic watch capable of measuring time in hundredths of seconds; a new womenswear
range that embodies the timeless values of this Maison de Couture will further streng-
then the Dior Watches collection; Sephora will sharpen its focus on exclusive products
and innovative services…
NEW FRONTIERS
We have a number of medium and long-term growth drivers within the Group. In geogra-
phical terms, they are mainly to be found in Asia, and most notably in China, a market
that is awaking to luxury products and tourism and whose potential is very real. India and
Russia are also promising territories for the future. In all these geographies, LVMH is a
pioneer, just as the Group once was in Japan. In terms of new products, we are deve-
loping our expertise and our market positions in growth segments such as men’s fashion
and shoes, demonstrating our ability to exploit and even pre-empt changes in the market
and in the demands of our clientele. The development within Moët Hennessy of the
famous Scotch malt Glenmorangie, positioned at the premium end of the most dynamic
whisky market, together with the expansion of our Belvedere vodka, will further streng-
then our leadership in luxury wines and spirits.
LVMH intends to seize all the above opportunities, improve performance across all
businesses and make marked progress. Our confidence is based on the talent of our
teams and managers, our artisans and our designers, on our organisation’s ability to
react to change, on our ability to get the most out of our high-growth potential brands
and on the strength of our distribution networks. Finally, our confidence is also foun-
ded on the loyalty of our shareholders who continue to back the strategy of the fore-
most luxury goods group in the world and whom I would like to take this opportunity
to thank.
March 9, 2005
Bernard Arnault
Chairman and CEO
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2005 WILL BE A VERY
DYNAMIC YEAR. WE HAVE
A NUMBER OF MEDIUM
AND LONG-TERM GROWTH
DRIVERS. TRUE TO ITS
PROMISES, LVMH CONFIRMS
THE PERTINENCE
OF ITS BUSINESS MODEL,
STARTS A NEW YEAR
OF GROWTH AND REAFFIRMS
ITS FUTURE AMBITIONS.
Chairman’s message