LVMH Overcomes China Slowdown With First-Half Sales Surge

French luxury retailer LVMH on Tuesday (July 26) reported 21% organic sales growth in the first half of 2022, despite rising concerns about increasing inflation and slowing sales in China, according to a Tuesday (July 26) press release.

Sales across the LVMH platform of brands were up 28% half over half from 2021, rooted in boosted demand for leather goods, wine and spirits and cosmetics compared to the same period one year earlier.

LVMH saw a 2% sales increase in France and the U.S. for the first six months of 2022, helping to offset both the drop in sales across Asia and shutdowns across Russia in the wake of its ongoing attacks on Ukraine.

“Revenue picked up strongly in the second quarter due to order levels catching up on their backlogs following supply constraints in the first quarter,” according to an LVMH statement. “Demand remained high in the United States, despite being hampered early in the year by recurring logistical issues, whereas China was affected by the public health situation. Europe and Japan saw strong growth in the first half.”

LVMH cited champagne sales as accelerating sharply at the start of the summer, a sign that people are emerging from their pandemic era lockdowns after two years of COVID-19 quarantines to get together and celebrate special occasions again.

Related: Nike, Uniqlo, LVMH and Other Big Brands Face Growing Challenges in China

In April, global fashion, perfume, leather and liquor conglomerate LVMH told investors that its Asian revenues excluding Japan — its single-largest geographic region which accounts for 37% of global revenue — saw Q1 growth slow to 8% this year from 86% in 2021.

Companies that have become used to the double-digit expansion in the region and have invested heavily in both factories and physical outlets to capture it, have found themselves in a position where China has become too big to bail.

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