(E24) While the sale of luxury brands is declining across Europe, Louis Vuitton had a strong performance in Norway last year.
– It turned out to be a bit bigger and more expensive than I thought.
That’s what Viktoria Ølstad said while exiting the Louis Vuitton store on Karl Johans gate in Oslo. In the large, orange, and exclusive shopping bag she carries, there is a brand new toiletry bag costing 9,900 kroner.
– I am about to give birth soon and am packing my maternity bag. I was missing a toiletry bag and thought, “why not?” So I treated myself to a “push presentpush presentA gift given to a new mother.” for myself.
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Increased by 44 million
Ølstad mentions that she usually doesn’t shop at luxury stores. However, many others did so last year.
Despite economic downturns and high interest rates, Louis Vuitton products sold for 263 million kroner in Norway last year. This represents an increase of 44 million kroner compared to the previous year.
This is shown in the recent annual accounts from Louis Vuitton Norway.
Pre-tax profits increased by over ten million kroner, from 52 million kroner in 2022 to 63 million kroner in 2023.
In the annual report, the company states that it “believes in continued growth in the Norwegian market.”
The Louis Vuitton store in Oslo saw many visitors Wednesday afternoon, with many of them seemingly tourists.
Tourists can receive a refund of the VAT on items purchased in Norway. Additionally, the historically weak krone makes it more attractive for tourists to both vacation and shop in Norway.
Decline in group sales
While consumers did not hold back on luxury shopping in Norway last year, Louis Vuitton’s owner LVMH reported disappointing quarterly numbers on Tuesday.
In the months of April through June this year, the group’s revenue fell to 20.98 billion euros. This is a decline from 21.20 billion euros in the same period last year.
In addition to Louis Vuitton, LVMH also owns the champagne brand Moët Hennessy and the fashion brand Dior.
The recent decline is attributed in part to decreased demand in the two main markets, the USA and China.
Sales in Asia, excluding Japan, dropped by 14 percent in the second quarter. In Japan, sales surged by a remarkable 57 percent. The company notes that the robust growth in Japan is largely driven by Chinese tourists.
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Macroeconomic challenges
Elsewhere in Europe, the luxury market has also faced challenges in recent months. Reports of “crisis quarters” and poor prospects for brands in similar segments are coming in.
The CEO of the British fashion house Burberry was ousted after the company reported disappointing sales and halted dividends in the last quarter.
– We are operating in a market with declining demand for luxury goods, with all key regions affected by macroeconomic uncertainty, Burberry wrote in its quarterly report.
The same was indicated by the German fashion house Hugo Boss when it revised its profit forecasts for 2024.
The same applies to Swiss watch and jewelry manufacturer Swatch Group, which owns luxury brands like Omega and Longines.
Swatch Group’s operating profit fell by a staggering 70 percent, while revenue dropped by 14 percent in the second quarter, as reported by Yahoo Finance. The decline is mainly due to a drop in sales in China.