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Wines and spirits continue to drive growth for LVMH amid luxury market slowdown

Published:  11 October, 2016

The wine and spirits division represented the second highest growth area for LVMH in its sales so far this year, with organic growth up 7%.

In the nine months to September 30 2016, organic sales of wine, Champagne and spirits rose 7% and reported sales were up 5%, bringing total revenue for the category to €3.3 billion.

Champagne volumes, including flagship brand Moet & Chandon, were up 3% over the period, with a particularly strong performance in prestige cuvees according to the luxury goods producer.

Hennessy cognac volumes were reported as being up 9%.

The United States continued to display strong growth and China showed improved momentum during the period, following the destocking of distributors in 2015.

Other spirits, Glenmorangie and Belvedere continued their development.

The alcohol business was second to perfumes and cosmetics, which saw a 6% increase in reported sales and 8% in organic sales over the nine months.

But despite flagging sales in its core fashion unit, fashion and leather goods continues to be the main breadwinner for the company, bringing in a total of €9 billion over the same period. Across all channels, the company recorded a 4% increase in revenue, reaching €26.3 billion, for the first nine months of 2016.

As in its H1 2016 results, the conglomerate continued to see growth in its wine and spirits business compared to flat profits in its fashion sector.

However, while sales growth picked up over the course of this year, the company is growing far more slowly than last year, reflecting a general slowdown in the global luxury market.

As LVMH doesn't report quarterly profit figures, the impact the slowdown has had on profitability will only become clear when the company releases its full-year results.