LVMH Sees 12% Growth In Sales In First Half 2001.

Business Editors

PARIS--(BUSINESS WIRE)--July 9, 2001

LVMH Moet Hennessy Louis Vuitton (NASDAQ: LVMHY), the world's leading luxury goods group, today announced that consolidated sales in the first half of 2001 reached 5,643 million Euros, an increase of 12% compared to the first half of 2000.

In the second quarter, sales also grew by 12%, despite a less favourable economic climate than that of the second quarter of 2000, where sales rose by 40%. The Fashion and Leather and Perfume and Cosmetic business groups performed excellently.

      On a divisional basis, sales were as follows :

 In millions of Euros      1st half 2001     1st half 2000     Change

Wines & Spirits                852               870            -2%

Fashion & Leather Goods      1,746             1,473           +18%

Fragrances & Cosmetics       1,038               901           +15%

Watch & Jewelry                263               270            -3%

Selective Retailing          1,680             1,464           +15%

Other activities                64                54            N/A

Total                        5,643             5,032           +12%

Sales in Wines and Spirits improved in the second quarter 2001 to reach 852 million Euros. Heavy stocking at the distributor level continued to weigh on sales of Champagne, especially in the US. However, there are signs that these stock levels are falling. Cognac registered sales of 403 million Euros (+8%) thanks to continued strong demand in the US and Asian countries, outside Japan. All of our cognac ranges (VS, VSOP, XO) registered double digit growth in the North American market.

After an exceptional increase of 40% in the first half 2000, sales in the Fashion & Leather business group rose by 18%. Sales for Louis Vuitton Malletier, which now has 287 stores throughout the world, were up by 10%, despite constraints in production capacity. Sales improved for other brands with particularly strong performances for Loewe and Thomas Pink as well as Fendi and Kenzo which have recently increased control of their distribution. As of June 30, 2001, the Fashion and Leather Goods business group has a network of 665 stores.

Sales in the Perfumes & Cosmetics business group totalled 1,038 million Euros in the first half of 2001, an increase of 15% and significantly ahead of growth in the market. Sales in the four French fragrance houses alone increased by 14%. The perfumes, "J'Adore" by Christian Dior and "Flower by Kenzo", met with exceptional success. There was also a good reception for Dior's new skin care lines No Age and IOD. Sales growth in the US has exceeded 25% thanks in particular to the excellent performance of the division's start-ups, especially Bliss and BeneFit.

Sales in the Watches & Jewelry business group are stable, following the decision to terminate some manufacturing licences for non-Group watch companies and as a result of slower growth in the US economy. The reorganisation of this branch is well underway, and advertising campaigns are producing excellent results, particularly for Zenith watches. Chaumet and Benedom, with the new Chris 47 Dior watch, also recorded strong sales growth.

Sales in the Selective Retailing business group were up by 15%. Sephora sales in the first half rose by 37%. In Europe the new management team is focusing on improving the profitability of the 393 existing stores and there are plans to open 8 additional stores by end of the 2001. In the US, growth of comparable Sephora stores was in excess of 10%, demonstrating that the concept is gaining recognition and market share, even in a difficult business climate. The evolution of the yen and the continued uncertainty of the economic climate have affected the travel patterns and consumer sentiment of Asian clientele, with a direct impact on results at DFS locations.

LVMH maintains its double digit growth targets for sales and operating profit for the full year. As explained at the AGM on May 14th, this is a target and not a forecast, and is subject to economic and currency fluctuations in the coming six months. As also stated at the AGM, operating results in the first half are likely to be significantly weaker than for the full year.

First half results will be published on September 13.

About LVMH

LVMH Moet Hennessy Louis Vuitton is the world's leading luxury goods group. The Group is represented in Wines and Spirits by a portfolio of brands that includes Moet & Chandon, Dom Perignon, Veuve Clicquot Ponsardin, Krug, Pommery, Chateau d'Yquem, Chandon, Hennessy and Hine. Its Fashion and Leather Goods division includes Louis Vuitton, the world's leading luxury brand, as well as Celine, Loewe, Kenzo, Givenchy, Christian Lacroix, Thomas Pink, Fendi and Pucci. In addition, LVMH recently finalized the acquisition of Donna Karan, the legendary American brand. LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Givenchy, Kenzo, and six promising cosmetic companies, Bliss, Hard Candy, BeneFit Cosmetics, Urban Decay, Make Up For Ever and Fresh. LVMH is active in selective retailing through DFS, Miami Cruiseline, Sephora, Le Bon Marche and La Samaritaine. In 2000, LVMH launched eLUXURY, the authoritative online source for luxury goods on the Internet.

LVMH's Watch and Jewelry division comprises TAG Heuer, Ebel, Chaumet, Zenith, Fred, as well as Omas, the prestigious Italian writing instruments company. Phillips, one of the world's largest auction houses, which has teamed up with L'Etude Tajan and Geneva art dealer de Pury & Luxembourg Art, belongs to the LVMH group. Connaissance des Arts and Art & Auction Magazine, two specialized publications, also joined the Group.

LVMH shares (LVMH.PA) are listed on the Paris Stock Exchange and NASDAQ in the United States (LVMHY).

"Certain information included in this release is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially. The Company's businesses include its wines and spirits, fashion and leather goods, fragrances and cosmetics, watches, and selective retailing activities, and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting these businesses.

Forward-looking statements with regard to the Company's businesses involve a number of important factors that are subject to change, as are mentioned under "Risk Factors" in the Company's Form 20-F for the year ended December 31, 2000 which is on file with the United States Securities and Exchange Commission".

Additional information on LVMH can be accessed on the company's home page: http://www.lvmh.com.