* LVMH sales surge in Q2, higher than some forecasts
* Fashion brands like Loewe, Celine add to growth
* LVMH investing in labels, small deals in the sector
* Setting bar for rivals amid COVID-19 crisis rebound
PARIS, July 26 (Reuters) - Surging sales of fashion lines
and handbags by Dior, Fendi and Louis Vuitton powered LVMH's
revenues in the second quarter as coronavirus restrictions eased
around the world and the luxury goods group edged out some
rivals to raise its market share.
The luxury goods industry is recovering from the health
crisis, which shut down global travel and temporarily closed
stores. The end of COVID-19 lockdowns across much of Europe is
reviving demand in the region after a strong Chinese rebound.
LVMH, the world's biggest luxury goods group, has benefited
more than most, using its heft to spend on marketing and social
media campaigns when some of its smaller rivals are still
struggling to get back on their feet.
The conglomerate said on Monday that its biggest revenue
driver, Vuitton, as well as fashion brands Dior, Fendi, Loewe
and Celine had posted record sales and profitability in the
first half of 2021 and increased their market share.
Brands have ramped the number of "pop-up" temporary shops in
resorts, which travellers are returning to, and are refurbishing
some other stores, the company said.
Financial Chief Jean Jacques Guiony told reporters the group
had "room for manoeuvre" on margins to be able to invest more in
the second half of the year without impacting profitability.
"It's certainly not the mood of the various brands,
particularly in fashion and leather ... to stay quiet,
particularly from a marketing viewpoint," Guiony said.
Overall sales at the LVMH, which also owns champagne and
cosmetics labels, rose by 84% year-on-year in the second quarter
on a like-for-like basis, which strips out currency swings, and
stood at 14.7 billion euros ($17.36 billion).
That beat an analyst consensus forecast for 69% growth cited
by UBS but in line with HSBC estimates. It was also 14% above
pre-pandemic, 2019 levels.
Operating profit in the first six months of this year more
than quadrupled compared with a year ago, beating expectations
among analysts polled by Refinitiv.
"This update should reassure, as the sector goes through an
inflection," Bernstein analyst Luca Solca said in a note.
Gucci owner Kering, LVMH's major Paris-based
rival, and handbag maker Hermes, which have also
bounced back from the COVID-19 crisis, are due to report results
NO 'BIG' ACQUISITIONS
Shares in LVMH have surged by more than 70% since June last
year, making the group the biggest European company by market
value and allowing boss Bernard Arnault to briefly overtake
Amazon founder Jeff Bezos as the richest man in the world.
Fresh from its $15.8 billion purchase of U.S. jeweller
Tiffany, completed in January, Guiony said LVMH was still
interested in smaller deals to access new markets, technologies
or products, though it had no plans for more "big acquisitions"
Last week, LVMH said it would buy a 60% stake in Off-White,
a streetwear label founded by Vuitton menswear designer Virgil
It has also taken a minority stake in a new label being
launched by Celine's former star designer Phoebe Philo, and
raised its holding in Italian shoemaker Tod's to 10%.
Away from fashion, it teamed up with Italy's Campari
to invest in wines and spirits e-commerce companies
and create a European e-commerce player in the sector.
LVMH's revenues had dropped 16% last year, when the pandemic
triggered global lockdowns and international travel ground to a
Its retailing division, which includes beauty chain Sephora
and also duty free group DFS, has suffered more than its other
businesses, although it clawed back some ground in the second
($1 = 0.8468 euros)
(Reporting by Silvia Aloisi and Mimosa Spencer, Additional
reporting and writing by Sarah White. Editing by Jane Merriman)