Louis Vuitton SWOT & PESTLE Analysis

Strength

1. Strong and well-known luxury brand with global presence: It is one of the most well-known fashion boutiques in the world with more than 160 years of history. The brand is easily recognizable because of its logo and monogram canvas on most of its products. The Louis Vuitton brand and the LV monogram feature amongst the globe’s most valuable brands. The Company is acclaimed as world's most valuable luxury brand – maintaining its No. 1 position for consecutive years since 2006 to 2018. LV has a strong brand image and has its identity in the world’s leading financial hubs such as China, Japan and Hong Kong, which have high concentrations of high net worth individuals. It also has an international high profile clientele base including a cultivated celebrity following comprising of famous musicians, actors and models like such as Jennifer Lopez, Keith Richards, Madonna, Sean Connery, Michelle Williams, Matthias Schoenaerts, Jennifer Connelly, Hayden Christensen, Angelina Jolie, Gisele Bündchen and most recently David Bowie, to name a few. Due to the popularity of the Brand's products and its strong performance, LVMH Group has 5,000 stores globally. The Company operates in some 70 countries across the globe selling over 75 brands as of 2020.

2. Consistently sound financial performance: LVMH saw a decline in its revenue in 2020, amounting to €44,651 million, due to Covid-19 pandemic. Although the net revenue and organic revenue declined by 17% and 16% respectively, the group showed a good resilience in the time of economic crisis. As LMVH saw an improvement in trends, it only incurred 3% organic revenue decline in Q4 compared to the first nine months of 2020. Significant performance was seen in Fashion & Leather Goods, contributing double-digit growth in the third and fourth quarter. As the performance improved in the second half of the year, profit from recurring operations amounted to €8.3 billion and the operating margin reached to 18.6%. Due to the creativity and eminence of the products the brand saw sturdy growth in Asia and the United States. The brand offers an exclusive in-store and online shopping experience to their customer which is also the reason behind the robust growth in these regions.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

1. Shifting of consumer preferences towards experiential spending: There is a slow but steady trend of consumers shifting their spending habits from materialistic goods toward traveling and dining out which are more experience related and give greater pleasure. For instance, in the United States in 2020, Americans spend approximately 3% of their income on apparel products and services. High end consumers do also not want to show wealth quite so conspicuously by investing in expensive labels in this age of social media and are there is increasing tendency to spend on experiences such as lavish vacations and dinners at starred restaurants. These shifting trends are worrying indicators for luxury fashion brands like Louis Vuitton.

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Technological

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Legal

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Environmental

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