DALLAS, Jul 29, 2004/ FW/ --- The global downturn on luxury watches and jewelry is over with LVMH posting a 32% organic growth on its watches and jewelry division for the first half of the year. The world’s leading luxury conglomerate announced last week its first half earnings for 2004, posting an overall 14% organic sales growth.

LVMH Moët Hennessy Louis Vuitton reported consolidated sales of 5,676 million euros in the first half of 2004, up 8 % over the same period last year, and up 16 % for the second quarter.

There have been market share gains across all brands, with watches and jewelry leading the pack followed by selective retailing (DFS and Sephora) posting a 21% gain.

With a recovery in tourism, DFS, the duty free stores acquired by the group during the late 1990s is now experiencing a revival of its earning capacity.

Historically a cash cow, DFS suffered a downturn on its financial performance in the early part of 2000s due to the unfavorable global economic and political climate that started with the “Asian flu” that hit Asian stock exchanges first during the late 1990s, then migrating to the whole world. Followed by terrorist attacks, war and SARs, tourism went down in general.

With the resurgence of tourism and the success of sales and marketing initiatives in its Galleria stores, DFS is once again enjoying a high turnover.

Sephora gained market share in France, notably due to its innovative products and services, new advertising campaigns and loyalty programs. In the US, Sephora continued its strong momentum. Sephora.com, its online arm, in particular achieved spectacular sales growth.

Wines & Spirits, the Group’s bread & butter division, delivered organic growth of 19% during the first half. With premium positioning combined with innovative communications and rapid development of Hennessy in China and Taiwan, the division achieved exceptional growth.

Louis Vuitton continues to be the star brand for the Fashion & Leather Goods division that posted 11% organic growth. Louis Vuitton reported a double-digit growth worldwide and was particularly very strong in the U.S. and Asian markets. With the introduction of the new collection of rigid bags, called Bellaix and a new jewelry line designed by Marc Jacobs, Louis Vuitton is expected to continue it’s global leadership.

For the Perfumes & Cosmetics that posted a 7% organic growth overall, Christian Dior maintains its position as the leading brand, attaining positive growth in the make-up category and also gaining popularity in Japan. Christian Dior is also launching a new fragrance this summer, “Pure Poison.” The new scent will be introduced in the U.S., followed by a European launch.

The remarkable performance of Louis Vuitton, the favorable trends for the activities at Wines & Spirits and Parfums Christian Dior, the improvement in results at Sephora and DFS have enabled the Group to record operating income growth of approximately 12% for the first half of 2004.