An “exceptional” year for LVMH's beauty retail brand Sephora is helping the group weather the downward trend in luxury.
For full-year 2023, LVMH’s revenue hit €86.2bn, a 9% increase on 2022.
Selective Retailing – the company’s second largest business after Fashion & Leather Goods – was a jewel in LVMH’s crown in 2023, growing 25% to reach €17.9bn.
This trajectory was led by Sephora, according to LVMH, which had a historic year for both sales and profit.
Momentum was said to be particularly strong in the North America, Europe and the Middle East markets.
Highlights included the much-hyped opening of its first two UK stores.
Sephora’s collaboration with Kohl’s in the US was also noted, along with the reopening of the beauty retailer’s Champs-Élysées flagship store.
Sephora continues to loom large in the public’s consciousness, with the phenomenon of ‘Sephora kids’ and the behaviour of the store’s pre-teen fans recently going viral.
Hong Kong-based luxury travel retailer DFS – also under LVMH’s Selective Retailing business – benefited from the recovery in international travel, especially the return of tourists to flagship destinations Hong Kong and Macao.
Under its Perfumes & Cosmetics business umbrella, LVMH said it saw “particularly strong” momentum in fragrances and make-up across all regions, boosted by its men’s fragrance Dior’s Sauvage, which was the world’s best-selling scent last year.
The business segment posted organic revenue growth of 11% for the year, reaching €8.3bn.
In addition to Sauvage, LVMH credited other Dior big-hitters Miss Dior and J’adore – including perfumer Francis Kurkdjian’s latest creation for the brand, L’Or de J’adore – with fuelling growth.
Fenty Beauty in make-up was likewise said to have posted robust growth, driven in particular by its 2023 launch Hella Thicc Volumizing Mascara.
LVMH’s 2023 figures suggest it is weathering the drop in luxury spend in key markets such as the US, Europe and China as the post-pandemic spending spree wears off, more successfully than its rivals.
Its performance outstripped prestige brand-owners like Kering (which saw group revenue decline 13% in Q3 2023 – its most recently reported results) and Estée Lauder Companies, for whom net sales decreased 10% in fiscal 2024.
However, it is not fully immune; LVMH’s growth last year was at a significantly slower pace than the 23% increase it achieved in 2022.