A unique family of brands in the luxury market!

In the fashion and leather goods sector, LVMH holds a unique group of brands spearheaded by Louis Vuitton, the world’s leading luxury brand.

Louis Vuitton, Fendi, Donna Karan, Loewe, Marc Jacobs, Celine, Kenzo, Givenchy, Thomas Pink, Pucci, Berluti, Stefanobi, Rossimoda and eLuxury form the Fashion and Leather Goods business group. This exceptional set of brands born on both sides of the Atlantic has 1,090 stores worldwide. While respecting the identity and creative positioning of each of the brands, LVMH supports their development by providing shared resources.

The exceptional image of Parfums Christian Dior, the star brand of the business group, the dynamic performance of all the perfume and cosmetic companies within the division, the vitality of their iconic product lines, and the deployment of exceptional creativity ensure growth in the LVMH market share year after year.

LVMH is a major global player in the select perfumes and cosmetics sector with the leading French houses of Christian Dior, Guerlain, Givenchy and Kenzo. Completing this group of internationally established brands are Benefit Cosmetics and Fresh, two young, highly innovative and high-growth American companies, the prestigious Italian brand Acqua di Parma, Parfums Loewe and Make Up For Ever, a French brand specializing in professional makeup products that has successfully begun to expand its customer base to consumers. Since 2007, the business group has also included Fendi and Pucci perfumes.

The newest of the LVMH business groups, joined by Hublot in 2008, holds a portfolio of leading brands with very complementary positioning. TAG Heuer, the star brand within LVMH and Swiss watchmaking, strengthens its position as the world leader in prestigious watches and sports chronographs. Zenith firmly establishes its identity in the restricted circle of true Swiss watchmakers. Christian Dior confirms the success of its Christal watch collection. Chaumet, the prestige jeweler on Place Vendôme in Paris, continues its targeted global expansion. Fred enhances its identity as a contemporary jewelry designer and De Beers affirms its positioning as a diamond jeweler.

Authenticity, creativity, excellence, craftsmanship… Luxury is born from invention and the hand of man. It works to exalt nature in its purest and most beautiful form. Sustainable development is inseparable from LVMH’s strategy. It is therefore presented in the annual report.

Read LVMH Annual Report 2008 Interactive Edition

Read LVMH Annual Report 2008 online, or you can download full report in PDF format.

Cover
A magical perfume, an exceptional casting: Charlize Theron, one of Hollywood's most famous stars is the face of the perfume J’adore. Born in 1999, J’adore immediately won over women's hearts. It is still adored today and its spectacular success is part of the history of Dior. Charlize Theron, its ambassador, radiant and luminous, appears illuminated with gold. Her gown, created by John Galliano, reveals all the splendor of “haute couture”. It is clearly stitched with DIOR thread.

Chairman’s Message

Our leading brands have strong, timeless values, which carry a true message of quality and a real promise of excellence. We will continue to support these brands so that they can, once again, assert their authenticity through powerful and qualitative innovation as well as creative marketing.

The Group’s solid performance in 2008 demonstrated, more clearly than ever before, the strength of its brands, the effectiveness of its strategy and the fantastic energy resulting from the commitment of its teams. With the economic slowdown intensifying during the last few months, the momentum behind our brands has often made the difference.

Our business is sustained by creative drive, the uncompromising quality of our products, the desire to surprise and engage our clients and to offer them a unique experience in our stores. All this derives from the talent and application of our employees. The proactivity of everyone in our Houses and across our markets worldwide has enabled us to respond rapidly to the unstable environment and to limit its consequences.

There have been a number of successes this year. I will start with those that we owe to our leading brands. Louis Vuitton, which enjoyed another record year, celebrated its timeless values through the iconic personalities that featured in its corporate campaign. Parfums Christian Dior, demonstrating its exceptional image and its roots in the world of couture, once again outperformed its competitors. Hennessy secured its leading position in China and Sephora gained further market share.

From our rising stars, we have continued to make excellent progress. Some examples are Ruinart’s remarkable achievements, further progress at Donna Karen which has built on the performance of recent years, the strengthening position of Ardbeg whisky, and the accelerated growth of Marc Jacobs, Benefit and Make Up For Ever.

A strong culture of innovation across all our business groups
In all our business groups, 2008 has been an extremely innovative year. We have released new cuvees and designed high value-added packaging for our cognacs, champagnes and whiskies.

Louis Vuitton demonstrated its close involvement with the art world through the launch of two Marc Jacobs collections conceived in collaboration with the artists Richard Prince and Takashi Murakami. Another highlight was the launch of Damier Graphite, a new signature range for our male clientele.

This line was remarkably successful in the second half of the year and we have great ambitions for it and its numerous incarnations. We launched new perfumes: Dior Homme Sport, Escale à Portofino by Christian Dior, Guerlain Homme, Play de Givenchy and KenzoPower. Our watch and jewelry brands have extended their iconic ranges. In Geneva, TAG Heuer won its fifth Grand Prix in six years for the Grand Carrera chronograph which was featured at Baselworld 2008. Chaumet launched a new collection of high-end jewelry and Sephora continued to affirm its status as the most innovative brand in the global beauty and perfume sector.

Financial strength, selective investments
2009 has started in a climate of considerable uncertainty for all businesses. It would be unwise to predict the length of the global economic crisis at this stage. However, whatever happens, we have prepared ourselves for a difficult environment throughout the year. We have strengthened our rigorous management by rapidly taking strict actions where necessary.

I am also aware that we must be even more selective in the decisions that concern the allocation of our resources: over the coming months, these decisions will be focused exclusively on our key profitability drivers, the most important projects, the most lucrative markets and only genuinely strategic opportunities.

Beyond short-term initiatives imposed by the current climate, LVMH – and this, in my mind, is key – will continue to implement its organic growth strategy, which is founded on innovation and geographic expansion. To achieve this, our Group can count on a number of assets.

In these turbulent economic and financial markets, one of the Group’s most important attributes is the strength of its balance sheet. Our debt levels are modest. Having constantly focused on cash generation, we have the ability to finance our own growth and therefore can calmly anticipate with, and I repeat, great vigilance, the moment of economic recovery.

Our continuing growth strategy
I would like to highlight one other point: in troubled times, consumers have a need, more than ever, for reference points.

In this regard, I believe I can say that our leading brands have strong, timeless values, which carry a true message of quality and a real promise of excellence. We will continue to support these brands so that they can once again assert their authenticity through powerful and qualitative innovation as well as creative marketing.

We will also support them as they expand geographically. In recent years, we have conquered new territories. Thanks to an early presence in the emerging countries, some of these markets are already important pillars of our growth. China, for example, has become the biggest market for Hennessy cognac and is the second largest customer base for Louis Vuitton worldwide.

The Group’s more recent moves are also very promising. Glenmorangie and Benefit have been hugely successful in Asia, Sephora in Eastern Europe, Marc Jacobs in Europe, Hennessy in Vietnam etc. In short, we will be on the front foot in all markets where we see strong growth potential.

During the various crises that LVMH has encountered throughout its history, our Group has always known how to concentrate on its priorities and to take advantage of the strength of its brands to reinforce its leadership of the worldwide luxury goods market. Our decentralized organization fosters a spirit of enterprise and also, therefore, reactivity - an essential quality in periods of uncertainty.

I know I can count on the men and women in LVMH to meet the numerous challenges ahead and to prepare our Group to continue its growth.

Bernard Arnault
Chairman & Chief Executive Officer

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