Louis Vuitton 2009 Annual Report Download - page 51

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DFS maintains its strategic course
After a first half year penalized both by the consequences of the
economic crisis and by concerns related to the H1N1 virus, the
second half of the year showed a trend toward improvement for
the players in “travel retail”.
In a difficult context worldwide, DFS posted a solid sales perfor-
mance and contained its profitability through rigorous control of
all operating costs. Excellent inventory management generated
cash flow that was significantly improved from 2008.
At the destinations traditionally popular with Japanese travelers,
business was impacted by a decline in traffic and the change in
DFS revenue was in line with the market. On the other hand, the
travel retail leader took advantage of the growth in Chinese tourism,
a phenomenon that had long been anticipated and that had been
placed at the center of its growth strategy. The stores serving this
customer base showed strong improvement. The Galleria in Macao,
which opened in 2008 at the Four Seasons Shopping Mall, was an
outstanding success. The renovation of the Chinachem Galleria in
Hong Kong also had a very positive impact on the appeal and busi-
ness of the store.
DFS also recorded very strong results for its first full year of opera-
tion in Abu Dhabi. It should be noted that this promising store
represents the first luxury site in a Middle East airport. Business at
the Mumbai airport (the first concession in India), which was still
modest, grew slowly but steadily.
The success of the new locations and stores which had been expanded
and redecorated confirmed the relevance of the investments made
by DFS in recent years and reinforces its prospects for future growth.
Miami Cruiseline
works to further differentiate its offer
In 2009, the business of Miami Cruiseline suffered from the
economic slowdown in the cruise market and the decline in
purchases made by primarily American customers. Cost-cutting
efforts did not totally offset the decline in revenue.
Despite the current difficulties, the cruise market offers excellent
prospects over the longer term, driven by an increase in new custo-
mers. With this in mind, Miami Cruiseline maintained its efforts to
make ongoing improvements in its supply chain and is working, in
line with a more targeted purchasing policy, to increasingly diffe-
rentiate its product offer on the basis of the customer profiles for
different cruise ships.
Sephora confirms its position as the most
dynamic player in the beauty market
Sephora turned in an excellent performance worldwide, with reve-
nue growth and an increase in profit from recurring operations,
resulting in market share gains in all its operating regions. Sephora’s
exceptional commercial vitality was driven by the expansion of its
store network in the most profitable markets and by a product
offer that is increasingly innovative and unique. The sustained
attention paid to the value of this offer, the development of brand
new services in the stores, and the very effective customer loyalty
programs are all additional assets that continue to be strengthened.
Tighter control of operating costs, positive changes in the product
mix and ongoing efforts to improve store productivity contributed
to the growth in profit from recurring operations.
The LVMH Selective Retailing companies operate in Europe, North America, Asia and the Middle
East. Their businesses are conducted in two segments: retailing designed for customers
who are international travelers (“travel retail”), the business of DFS and Miami Cruiseline,
leaders in their market segments; and the selective retailing concepts represented by Sephora,
the most innovative company in the beauty segment, and Le Bon Marché, the department
store with a unique atmosphere located on the Left Bank in Paris.