LVMH, owner of Louis Vuitton, on the future of retail: mainly in stores
Due to social distancing, shoppers wear face masks when they line up outside Louis Vuitton when South Coast Plaza reopens, forcing customers to maintain social distancing and wear face masks at South Coast Plaza on Thursday June 11, 2020 in Costa Mesa, California.
Allen J. Schaben | Los Angeles Times via Getty Images
LONDON – There are questions about the future of retail, but French luxury giant LVMH has no doubts what it will look like.
“We see the future in two things: being primarily retail stores, because the customer experience in a retail store cannot be easily compared online. To date, I mean, no one has found the kind of silver bullet that would allow customers to enjoy so much online, “Jean Jacques Guiony, chief financial officer of LVMH, told CNBC on Monday.
“The second point is also to enrich this experience with online content,” he added.
The coronavirus pandemic and the door-to-door orders that followed have resulted in a significant increase in online shopping and forced many retailers to expand their online offerings at a much faster rate. This dynamic in turn called into question the need for physical stores.
However, for LVMH, one of the biggest luxury brands in the world, the online offering is only a “complement to the physical experience”.
Guiony said most of the customers who visit the stores have already looked at the website and could have purchased the items they wanted there.
“They get a lot of information, but they come to the store because the store experience is something that can’t be matched on the internet,” he told CNBC’s Charlotte Reed.
Tiffany & Co. in Vienna, Austria, in the most prestigious shopping area in downtown Vienna, also known as Golden U on Kohlmarkt Strasse.
Nicolas Economou | NurPhoto | Getty Images
LVMH recorded a 17% drop in turnover in 2020 compared to the previous year. The company has been affected not only by local lockdowns, but also by international travel bans. Other brands owned by LVMH include Moet & Chadon, Marc Jacobs, Christian Dior and Bvlgari.
“I don’t know if we can talk about the Roaring Twenties… the analogy a century later makes me a little doubtful, but anyway, I don’t know if we can talk about it. You can certainly talk about the fact that business is doing well with most of the clientele, whether in Europe, whether in Asia, ”said Guiony. “Overall, frankly, we can’t complain.”
LVMH finalized the acquisition of Tiffany’s, the jewelry brand, for $ 15.8 billion last year.
“Integrating Tiffany is not a six-month job, it’s something that will last for several quarters and the goal is not just to integrate, it’s to grow the business until level that we think brand quality could generate, so it’s a long-term job, ”he added.
LVMH shares are up around 32.8% since the start of the year.