Arnault: DFS sale off the agenda

Dermot Davitt

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Retail division has "an impressive growth trajectory", says LVMH chairman Bernard Arnault

LVMH chairman Bernard Arnault has ruled out a sale of its retail division following the recent strong growth in revenues and profits posted by DFS Group and Sephora. Four years ago Arnault declared the then struggling retail business to be "non-core" to the group and opened the door to a sale of its retail assets, including DFS Group.

Speaking to analysts today, Arnault dismissed the notion of a sale. "Whether retail is core or non-core is now a non-issue," he said. "We are pragmatists. If we hadn't managed to turn the retail business around then we would have sold it. But now the retail companies are on a growth trajectory that is quite frankly very impressive. They are posting results that are always increasing. We believe Sephora can become a 'small Vuitton' in its own way. So our view is this: let's hang on to retail. If one day we can achieve 30% operating profit and a buyer is prepared to pay a fortune, then we might think about it."

Arnault's remarks followed today's results presentation for 2005. The group's Selective Retailing division, which includes DFS Group and beauty retailer Sephora, posted a 46% rise in profit, reaching €347m ($413.1m) compared with €238m ($283.3m). Operating margin for the division reached almost 10%. DFS posted double-digit revenue growth for the year.

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