Bulgari Endures First-Quarter Decline

RAPAPORT… LVMH saw a slump in jewelry and watch sales in the first quarter as the COVID-19 pandemic led to the closure of most of its global stores.

Revenue for the category fell 24% to EUR 792 million ($861.3 million) for the three months ending March 31, the company said last week. The spread of the outbreak affected luxury products in all the company’s major markets.

“The economic environment has been disrupted by a serious health crisis that has led to the closure of stores and manufacturing sites in most countries in recent weeks, as well as the suspension of international travel,” LVMH noted.

Sales at Bulgari declined due to store closures, particularly in Asia. That region had the longest shutdowns during the quarter, as the virus only spread widely in the rest of the world in the latter part of the period. While TAG Heuer and Hublot had a positive start to the year, a reduction in orders by retailers as closures loomed affected the watch brands later in the quarter, the company said. However, TAG Heuer’s new smart watch had a successful launch.

Group sales for the first quarter — including jewelry, wines and spirits, fashion, and cosmetics — fell 15% to EUR 10.6 billion ($11.52 billion).

LVMH expects weak sales in the second quarter as well, but cannot assess the full impact without knowing when business will return to normal in the areas in which it operates.

“We can only hope that the recovery happens gradually from May or June after a second quarter which will still be very affected by the crisis, in particular in Europe and the US,” the company added.


Image: A Bulgari store in Tokyo, Japan. (Shutterstock)