As we know, Louis Vuitton is part of Moët Hennessy • Louis Vuitton S.A. (aka LVMH). (Formed in 1987 when champagne producer Moët et Chandon and Hennessy, merged with fashion house Louis Vuitton in a to form the current group.) The alliance of luxury brands within the LVMH group have catapulted LVMH to become the world's largest luxury goods group.
Through the trust gained by consumers, shareholders, and investors, the accumulation of brands in the LVMH have all seen an extreme growth in revenue. Louis Vuitton especially; according to Bloomberg Business Week, "Vuitton brought in 28 percent of LVMH’s revenue last year and 57 percent of earnings before interest and taxes, HSBC estimates. LVMH, which doesn’t break out figures by brand, reported a 13 percent increase in fashion and leather goods sales in the first nine months of 2011."
Bernard Arnault, chairman and majority owner of the group, has called 2010 a "great vintage" for LVMH. In his Chairman's Message, Arnault shares the group has grown at a "remarkable pace", breaking all its "historical records"- LVMH revenues reached €20.3 billion ($28.26 billion), up from €17.1 billion in 2009. Total profits exceeded €4 billion.
Bernard Arnault
What does this mean for Vuitton? It validates their enormous role in the luxury goods industry. According to global research agency Millward Brown’s 2011 Brand Report, Vuitton topped the list in the luxury category, with a value of $24.312 billion (up 23 percent from last year). Vuitton placed at No. 26 on the top 100 list of 2011 Most Valuable Brands.
Vuitton uses disintermediation strategy to distribute their products. They sell on their website, their stand alone boutiques, and because of relationship commitment- directly to departments stores like Neiman Marcus, Saks Fifth Avenue and Bloomingdales. The prices remain the same in all three avenues of retail. Consumers know what price points to expect, therefore, they can buy confidently from any of the avenues listed.
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