LVMH: the competitive advantages

After having analyzed LVMH solid financial statements, let’s have a look on its history and vision. Most of Group brands have a long historical tradition in fashion and luxury, with a great brand value all over the World. The power of LVMH lays both in its European heart and taste for nice and in its presence all across de World, these characteristics justify the good past performance in stock exchange:

I strongly believe that it will perform much better than CAC40 over next years.

In order to better understand company soul, I suggest you to listen to Arnault’s annual shareholders speech.

We can easily point out the keys of his speech and predict the future high success of LVMH:

-they want to use money to improve their brands, focusing mainly on internal organics growth of the company’s 60 brands and not to buy other brands. I guess this is very important: adding value to the already owned brands all over the World.

-they want to develope retails and marketing in the fast growing countries with a deep focus in Asia and Russia, using the same approach they have for western countries. I guess this is by far a winning approach because they will continue doing what they do great, without changing marketing policy, using the same winning business in countries where they are running business by very long time and where th potential of future costumers is enormous.
Luis Vuitton opened its first boutique in China more than 20 year ago, when no one else, in this sector, was even thinking to take this kind of risk. Veuve Clicquot Ponsardin was sending Champagne to Tzar’s court since th XIX century, breaking the Napoleon’s rules against trade with enemies countries.

Company strenght, linked to Arnault's visionary passion and management skills are sure assets for a long term, astonishing growth of company’s revenues.

LVMH % weight in Value Finance portfolio is 5,2 % at 18th June 08. Entering date into portfolio: 30 mar 08