LVMH is to take a stake in Edun, the ecological and ethical fashion brand founded by U2 singer Bono and his wife, the head of the French luxury group said today.
"We are going to take a stake in Edun, an ecological and ethical brand," LVMH chief executive Arnault told shareholders at LVMH's annual shareholders' meeting in Paris. Details of the deal should be unveiled later today he said.
Edun would sit alongside LVMH's other fashion brands such as Celine, Kenzo, Marc Jacobs and Louis Vuitton.
Launched in 2005 by Bono and his wife Ali Hewson, Edun sells T-shirts and dresses in organic cotton made in countries such a India, Peru, Uganda, Kenya and Lesotho.
The company says on its website it aims to encourage sustainable employment in developing regions, particularly Africa.
As he announced the Edun deal, Mr Arnault said trading in April was broadly in line with the level seen during the first quarter, with a slight improvement in wines and spirits.
Asked about the group's operations overall, Mr Arnault told Reuters: "It is in line with the first quarter."
Jean-Jacques Guiony, LVMH finance director, later said there had been a slight improvement in wines and spirits particularly in Cognac sales, which made up about half of the unit's sales.
But one could not draw conclusions based on one month's trading, he added.
Moet Hennessy, LVMH's wines and spirit unit, saw revenues drop 22 per cent in the first quarter on a like-for-like basis. Hennessy volumes alone were down 21 per cent.
Mr Arnault added that Diageo, which still owns 34 per cent of Moet Hennessy, was not planning to sell its stake.
"To my knowledge, our partner is not looking to sell its stake, so the question is not on the agenda," he said.
Last month, LVMH denied it was in talks to sell control of Moet Hennessy to Diageo, attempting to quash market rumours the two groups were preparing a deal. Industry observers at the time said they believed Diageo appeared more keen to own fully Moet Hennessy than LVMH was ready to sell.
Citing analysts who expect to see green shoots of recovery next year, Arnault said he expected market conditions to improve faster in the United States than in Europe.
"The economy will have to pick up again," Arnault said.
LVMH shares, which have gained 18 per cent since the beginning of the year, were down 1.70 per cent at €56.31 by 1224 GMT.
Reuters