Dior AW 15 ad

Everyone’s been watching and waiting on the luxury sector to see it could defy the global downturn and make it through last year (and especially Q4) intact. The big questions are: did the Paris terrorist attacks hit luxury hard, what impact did the Chinese slowdown have, and has lower income from oil for Russian and Middle Eastern customers hurt sales?

So who better to ask than the world’s biggest luxury group? LVMH delivered its Q4 and full-year results yesterday and they were… very good. Phew! Bain & Co had already said last year would be the weakest for luxury since 2009 so even a powerhouse like LVMH could have been forgiven for weaker figures.

But this is one luxury group that delivers year after year. Louis Vuitton (as usual) was the star with double-digit growth through the year and plans for lots more launches this year to make sure it stays that way (including, incidentally, its first fragrance). Fendi sales rose more than 20% too – although figures for both brands were helped by exchange rate effects. The group also said it made progress with Givenchy, Céline and Kenzo, while Dior saw “remarkable momentum”.

So what does that come down to in numbers? Comparable sales for the group as a whole rose 6% last year with total sales at €35.66bn and profit from recurring operations up 16% to €6.605bn. Net profit actually dropped 37% to €2.8bn but that comparison was skewed because 2014’s results had benefited from the €2.8bn it gained after selling out of its Hermès stake. With  that factored out, profits rose 20%.

Sales in Q4 rose 5% comparable to €10.4bn, which may have been a bit down on the year as a whole but still beat expectations of a 3.9% rise.

In Q4, sales were better than the group itself had hoped in Europe, Japan and the US, which made up for weakness in China (sales there were “stable”, the company said). In France, where it gets 10% of its sales, the 50% drop after the November terrorist attacks has almost been wiped out with sales getting close to normal levels again. CEO Bernard Arnault said the company’s big brands were trading only 4% to 5% down since the attacks.

Lois Vuitton AW15 ad

The Q4 picture

The group’s key fashion and leatherwoods division saw sales up 3% on a comparable basis in Q4, much better than the flat-to-only-slightly-up sales analysts had predicted. But the unit still isn’t riding high as it was earlier in the year. Growth had been 10% in Q2.

Perfumes and cosmetics also saw market share gains and successful launches with comparable growth of 7%. Dior accelerated its

growth and increased worldwide market share. The new men’s fragrance

Sauvage experienced “unprecedented worldwide success”.

In the watches jewellery unit there was good jewellery growth with comparable sales up 8%. Bulgari had a good year. But watch brands suffered from cautious buying patterns. However, TAG Heuer had success with its smartwatch developed in partnership with Google and Intel.

In selective retailing (beauty chain Sephora and duty free chain DFS), comparable revenue rose 5%. Sephora’s year was “exceptional”, boosted by omnichannel development.

The big question now is whether LVMH can maintain its momentum in 2016. It gave no hints on current trading but the issues it faced last year remain. Bernard Arnault even said that another global crisis would be along at some point (although any student of recent or long-term history could have told him that).

The fact is, every boom has a bust at the end of it and the nature of the world at the moment means that the next crisis is usually just around the corner. Terrorism is still with us, and we’re all worried about Zika (an illness most of us had never heard of until a few weeks ago). For LVMH in particular, share markets are volatile and the oil price is still low – so many of its customers will be noticing a few million dollars, euros, pounds, roubles or yuan less in their Swiss bank accounts. Somehow, though, I think LVMH will still convince them to spend…

Fendi AW15 ads