LVMH, the world’s largest luxury group, has recently announced a 20% decrease in its dividend for the year 2019. The decision comes in response to a 15% decline in sales during the first quarter of 2020, which has been attributed to the global pandemic. The chairman and CEO of LVMH, Bernard Arnault, expressed concern about the slow recovery from this crisis in the coming year.
Amidst the unprecedented situation, Arnault emphasized the company’s top priority of ensuring the health and safety of its employees and clients. LVMH adapted its manufacturing facilities to produce essential supplies such as hand sanitizers and face masks, while also providing financial assistance to organizations including the Chinese Red Cross and Paris hospitals. In the digital realm, LVMH experienced significant online growth, with some of its brands witnessing growth rates exceeding 100%.
Arnault underscored the importance of LVMH’s commitment to environmental responsibility, highlighting the company’s partnership with UNESCO and its efforts to protect biodiversity and support beekeepers. He further emphasized LVMH’s belief in fostering creative talent and promoting diversity and inclusion.
Regarding the acquisition of Tiffany, which has faced a decline in sales due to the global lockdown, Antonio Belloni, a board member of LVMH, stated that Tiffany is an iconic jewelry brand that holds a significant place within LVMH’s portfolio.
Due to the pandemic, LVMH’s annual general meeting (AGM) was conducted privately at its headquarters in Paris, with shareholders and media not permitted to attend. In January, LVMH announced record sales for 2019, reporting a 15% increase in annual turnover and a net profit of €7.2 billion.
Despite challenges faced by its duty-free shopping division in Hong Kong and the impact of the pandemic on global travel, LVMH remains committed to investing in its properties and taking advantage of the eventual recovery of the tourism industry. The company has also been actively supporting its suppliers during this difficult period.
While specific compensation details for senior executives were not disclosed, LVMH defended its decision to reduce the dividend, stating that the crisis necessitates collective effort. The company has managed to minimize layoffs, with only a small number of employees, fewer than 20 in France and a small number elsewhere, losing their jobs.
Arnault expressed regret over the closed nature of the AGM and expressed hope that the next meeting, scheduled for April 15, 2021, would not face similar restrictions.