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1.

History, development and growth of LVMH


1.1. Brief presentation of LVMH
LVMH Mot Hennessy Louis Vuitton S.E (LVMH) is French-based luxury-goods
holding. It owns a vast portfolio of brands that are, to a large extent,
autonomously run. The business activities of the holding are divided into 5 main
business groups:

Wines and Spirits;


Fashion and Leather Goods;
Perfumes and Cosmetics;
Watches and Jewellery;
Selective Retailing.

1.2. Corporate History and Development


Mot was founded in 1743 and quickly became the champagne provider for the
royal court1. By the end of the year, they began exporting to Germany, Spain and
the Americas. However, the expansion of the company began in 1792 with
strategic acquisitions of vineyard across France that secured the company as the
number one Champagne provider of Europe. In 1832 the name was changed to
Mot et Chandon. The companys average annual sales were believed to have
been about 20,000 bottles during the 1820s. By 1872 that figure had risen to two
million, and by 1880 it had reached 2.5 million 2
In 1854 Louis Vuitton opens the first trunk making business in Paris which was
very successful. By 1888 they claimed their first patent and moved operations
closer to suppliers. They shifted to other leather goods when the core business
began to be less profitable.
In 1971, Mot-Hennessy was formed by the merger of the company with the
French second largest cognac producer, Hennessy. The merger was made due to
the need of diversification since French legislation caps the total amount of
Champagne a firm can produce.
In 1987, a 2.5 billion merger was effected between Louis Vuitton with MetHennessy, which allowed Louis Vuitton to expand its investments in the luxury
business, while saving Met-Hennessy from the threat of takeover. 3
In the mid-1990s the company focused on growth and expansion spending
over 1.5 billion on strategic acquisitions of suppliers, stores and other brands.
Profits were severely affected in this period. By 1999 they entered the online
retail business to compete with non-brick-and-mortar shops.
1.3. Current Growth

1 Mot & Chandon: 270 years of History, 2013, Moet.com,


2 LVMH SA History 2000, International Directory of Company Histories
3 Ibid.

In 2014 LVMH sales advanced as forecasted by Bloomberg analysts to around 6


billion for Q3 2014 and growth in Europe compensated for low sales in Asia.
LVMHs quarterly report states that in an uncertain economic and financial
environment, LVMH will continue its strategy focused on innovation and targeted
geographic expansion in the most promising markets.
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