Ladies and gentlemen, welcome to the LVMH Third Quarter Revenue 2011 Conference Call. I now hand over to Mr. Chris Hollis. Sir, please go ahead.
Thank you, Tanya. Good day. I'm Chris Hollis, Director of Financial Communications at LVMH. Joining me is Jean-Jacques Guiony, our Chief Financial Officer. Thank you for joining us. I have a few brief remarks to make about LVMH's revenue for the third quarter and for the first nine months of 2011, which report in accordance with the International Financial Reporting Standards. After these remarks, Jean-Jacques and I will be able to answer your questions. Before I begin, I must remind you that certain information to be discussed on today's call is forward-looking and is subject to important risks and uncertainties that could cause actual results to differ materially, and for these, I refer to the safe harbor statement included in our press release. Turning now to today's announcement, hopefully, you've all had a chance to read our release, which was issued earlier today in both French and English.
As always, the release is available on LVMH's website, www.lvmh.com, as are the slides that we're using to guide today's conversation. We're pleased to report that all our business groups reported double-digit organic growth for the first nine months of 2011. For the third quarter, we witnessed a continuation of the excellent trends that were evident in the first two quarters around the globe, with sustained growth in Asia , the U.S., and Europe. Japan is recovering as expected. Louis Vuitton continued its exceptional momentum, and our other Fashion and Leather brands are also performing well. Demand continued to be robust for Champagne and Watches, while inventories have been carefully monitored and are at optimal levels with our retailers. Finally Bulgari, they have been consolidated into our numbers for the first time in the third quarter.
On slide three, you can see the evolution of the group's revenue over the year. Our currency started with a positive impact in the first quarter. It has had a negative impact in the last two quarters and an overall - 2% impact for the nine months. A principal structural change relates to the consolidation of Bulgari in the third quarter. However, it is worth noting that organic growth has been consistently strong at between 14% and 15% throughout the first three quarters of 2011. Revenue for the third quarter was up 18%, or 17.6%, to EUR 6.0 billion. Excluding a 4% currency impact and the 7% structural impact, organic revenue increased 15%.
On slide four, you can see that from a geographical standpoint, our revenues for the first nine months are well distributed across our global markets, with approximately 1/3 in Asia, 1/3 in Europe, and 1/3 in the U.S. and other. Asia, excluding Japan, continues to grow as a percentage of our other businesses, accounting for 28% of revenues during the nine-month period. slide five shows the changes in nine-month revenue by region in local currencies. These figures exclude any revenue from Bulgari. Compared to the first half, the trends are similar, if not a little better, in most regions. Asia excluding Japan is leading our growth, up 27% in the first nine months, from 26% to be strong, up 18% in the first nine months. Once again, stronger than the 17% seen in the first half.
Declines narrowed in Japan to -3% compared to -6% in the first half after a positive Q3. This is a result of the return to normal business that we saw at the end of the first half, following the catastrophic events at the end of the first quarter in Japan. Finally, despite the economic challenges in Europe, revenue increased 7% in the region over the nine-month period. I'll move on to business segment performance, starting on slide six with Wines and Spirits. Looking at the nine-month period, reported revenue reached EUR 2.306 billion, and organic revenue was up 11% after taking into account a - 3% currency impact and a - 1% structural impact, which related to the sale of Montaudon Champagne last year. For the third quarter, organic growth for Wines and Spirits was up 8% after a - 4% currency impact and a - 1% perimeter impact.
If you break this down by the two different segments, in the nine months, reported revenue for Champagne and Wines reached EUR 1.071 billion after a - 1% currency effect and a - 2% structural effect. This represented a 9% organic revenue growth compared to the same period last year. Revenue growth for Champagne and Wines was 4%. For Cognac and Spirits, reported revenue for the nine months was EUR 1.235 billion, representing 12% organic growth after a - 4% currency effect. For the third quarter, Cognac and Spirits achieved an 11% organic revenue growth over the year-ago period for a - 5% currency effect. On slide seven, you can see that Asia continues to deliver a standout performance, up 28% in the first nine months. The U.S. and Europe are growing compared to last year as well.
Champagne volumes were up 6% on a comparable basis, with the prestige cuvées, notably Dom Pérignon and Krug, continuing their strong momentum. While consumer demand remains robust, we are also attentive to the levels of inventories at retailers as we enter the critical year-end period. We also saw demand continue to grow for Estates and Wines, sparkling wines. In Cognac and Spirits, Hennessy volumes were up 8%. Revenue benefited both from a positive impact of price increases and the improvements in mix. On a geographic basis, the strongest growth in this segment was from Asia, and in particular, China, where demand continues to grow at a rapid rate. Moving to Fashion and Leather, for the nine months, revenue in the Fashion and Leather group rose to EUR 6.2 billion from EUR 5.5 billion in the year-ago period. Excluding a - 2% currency impact, revenue rose 15% on an organic basis.
For the third quarter, organic revenue grew by 18% compared to the year-ago period. After a 4% negative currency impact, reported revenue reached EUR 2.218 billion. For the nine months, the Fashion and Leather business group continued to see strong performances across all regions, with double-digit revenue growth in Asia, the U.S., and Europe. Louis Vuitton continued its excellent double-digit momentum around the globe, with all product segments contributing to its performance. We're particularly pleased with the increasing popularity of its leather product lines and the continued strong showing of its classical lines. We're also very excited about the reception of Vuitton's new maroquinerie line, with its personalization service for a selection of five specific Louis Vuitton bags, including the 1932 Noé and the 1958 Lockit.
The opening of a very impressive Louis Vuitton island Maison in Singapore and a new and large store in Milan were other highlights in the quarter. Our other fashion brands also performed well in the quarter. Fendi delivered solid growth at both retail and wholesale levels. Donna Karan showed strongly, particularly in the U.S., and expanded its geographic footprint with the opening of a flagship in Korea in the third quarter. Céline in particular, but also Givenchy and Loewe, have benefited from the creative momentum at their respective brands to turn in some great performances. Now, looking at perfumes and cosmetics on slide ten, for the first nine months, organic revenue grew by 10% after a - 5% impact relating to the sale of La Brosse et Dupont last year and a - 2% currency impact. Reported revenue rose to EUR 2.3 billion.
For the third quarter, reported revenue was EUR 793 million, delivering organic growth of 6% compared to the year-ago period after a - 3% currency impact and a - 5% structural impact. Turning to perfumes and cosmetics on slide eleven, both the Asian and the U.S. markets have been a strong performer in this sector, with 20% growth in local currencies. We saw continued momentum at Parfums Christian Dior, led by the strengths of its iconic fragrances, Dior Homme and the mythical J'adore. Dior Addict lipstick also showed rapid growth. Hypnotic Poison benefited from the introduction of its new muse, Mélanie Laurent. Highlights at Guerlain included the successful international launch of Shalimar Parfum Initial. Skincare lines continue to show very exciting progress. In addition, the renowned international actress Michelle Yeoh was named ambassador for Guerlain and will help introduce our Asian clients to the enchanted world of our perfume creations.
Parfums Givenchy had solid growth, fueled by Very Irrésistible, and the initial rollout of its Dahlia Noir fragrance. Benefits saw continued double-digit revenue growth and had a successful launch of their real mascara. Now, let's move to watches and jewelry on slide twelve. In the first nine months, we saw organic growth of 26% compared to the year-ago period, including the integration of Bulgari, which adds a 48% structural impact and a positive currency impact of 2%. Reported revenue was EUR 1.212 billion compared to EUR 687 million in the year-ago period. For the third quarter alone, revenue reached EUR 636 million, representing organic growth of 25% after a - 1% currency impact and a 136% positive impact from the integration of Bulgari.
If we just exclude Bulgari on the revenue by regions, revenues for this business group in local currencies for the nine months was up an impressive 49% in Asia, 29% in the U.S., and 21% in Europe. Bulgari was fully consolidated into the group as of June 30, 2011. Following the success of the public tender offer, we now own 100% of this iconic brand. I'm delighted that Bulgari is now a member of our family of luxury brands. Its performance in the quarter continues to trend. It reported in the first half with growth in all product categories. TAG Heuer benefited from strong growth of both its iconic lines and the new jewelry model in its Formula One Ceramic Line. The launch of new LINK watch is also off to a promising start, demonstrating continued strength in the luxury watch market and its own product innovation.
Hublot enjoyed a highly successful rollout of its Classic Fusion collection and saw continued solid momentum in its King Power line. The El Primero and Captain lines at Zenith showed good performance. On the jewelry side, Chaumet, De Beers, and Fred all turned in strong performances in owned stores, demonstrating their lines continue to resonate well with customers. Finally, revenue in Selective Retailing in the first nine months rose to EUR 4.378 billion after a - 4% currency impact and a 3% positive structural impact from the integration of Ile de Beauté. Organic revenue grew a strong 19%. For the third quarter, revenue reached EUR 1.547 billion. After a - 6% currency impact and a 5% positive structural impact, organic revenue grew by 21% compared to the year-ago period. In local currencies, revenue in Asia was up 34%, 19% in the U.S., and 10% in Europe, excluding Ile de Beauté.
DFS is doing extremely well and continues to benefit from vibrant businesses from the Asian traveler, particularly in Hong Kong, Singapore, Macau, and Hawaii. They have also benefited from the increase in travelers at their Japanese destinations, given the relative strength of the yen. Sephora had solid comparable store revenue growth in all regions and gained market share. Sephora's online presence continues to be a strong growth vehicle. Understanding the strengths of the brand, the company confirmed its success in new territories such as Latin America and accelerated the expansion of its store network with successful launches of 13 new stores in the quarter, including, among others, new stores in New York, meatp acking district, and in Kuala Lumpur in Malaysia. Just to conclude very briefly, overall, we're very pleased with our Q3 performance, which has seen revenue growth in all regions and all sectors.
Our focus will continue to be on innovative quality products, and we will continue to selectively expand our store networks in the most promising regions. Based on this performance, we believe that we're well positioned to achieve our goal of increasing our leadership in the worldwide luxury goods market in 2011. With that, Jean-Jacques and I are available for your questions. Tanya, I'll hand that back to you.
Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad. Thank you. Ladies and gentlemen, I remind you that if you wish to ask a question, you have to press zero one on your telephone keypad. Thank you for holding. We have a question from Mr. David Wu from Telsey Advisory Group. Sir, please go ahead.
Hi. Good afternoon, everyone. Congrats on another solid quarter. I just have three questions. First, can you talk about how sales progressed through the third quarter and whether trends have sustained the momentum during the first two weeks of October? Secondly, can you talk about your performance in Europe, which countries you're seeing strength as well as relative softness? The second part to that, obviously, you've continued to benefit from pretty solid tourist spending. I also was curious to see whether local spending in Europe is still healthy or if there's been any changes in spending patterns to call out in the past quarter. Lastly, on selective retailing, I'm just curious how much of the growth was driven by DFS versus Sephora, and could you provide us with the third quarter Sephora comps for the U.S. and Europe? Thank you.
All right. Let's start with Q3 pattern. More or less, as you can see, we had 15% organic growth in the quarter, with slight variances around this average. This is what we had in July, August, and September. There were no major fluctuations around the average. As far as October is concerned, it's obviously too early to say. We just have the figures for our retail businesses, and what I can say is that they are in line with what we've seen so far this year. As far as Europe is concerned and which geographies are doing better and which are doing worse, no surprise. The south of Europe, and particularly, obviously, Greece, but also Spain and Portugal, are showing some weaknesses despite the fact that some markets, like Spain, for instance, could benefit from a lot of touristic activity.
No surprise, the south of Europe is softer than the north of Europe. As far as tourists versus locals are concerned, touristic activity is high and remains high throughout the quarter. It's only Vuitton that we can really monitor that. The domestic customer base compared to tourists were more or less in line, be it in France or in other geographies. In other geographies, tourists are probably growing a bit faster than the domestic customer base. All in all, these are fairly close figures. Finally, Sephora, your question on the comps. Comps in the U.S. was + 13% for the nine months, but it's also true for Q3. As far as Europe is concerned, it's + 7%. Same thing, nine months and Q3 figures are very, very close.
Excellent. Thank you very much.
We have a question from Mrs. Melanie Anne Flouquet from JP Morgan. Madam, please go ahead.
Yes. Good afternoon, Chris and Jean-Jacques. I have two questions, if I may. The first one is regarding an outlook statement that there is in your English press release, which actually says you're confident for the remainder of the year rather than the whole year 2011, as in your French release. I was wondering whether you could share with us where you believe you have the most visibility. I imagine Louis Vuitton would be one, given the supply constraints that you used to have and that you don't have anymore, at least not to the same extent. If you could share with us by divisions and by regions where you believe you have the most visibility, that would be very useful. The second one is regarding the Wines & Spirits division.
You're mentioning the end consumer demand is still growing and that you have done some careful inventory management, I suspect notably in the U.S. and Europe. Could you share with us to what extent the level, the more subdued growth we're seeing in the U.S. and Europe is actually down to the level of inventories that is carefully managed versus the end consumer demand? Thank you.
Okay. Your first question is awfully difficult because visibility and confidence are basically two different things. It is very difficult to assess any visibility. As you know, our visibility is as good as yesterday's sales. It is quite complicated. What we say when we mention confidence is that we see the environment in which we operate not being meaningfully different from what it's been since the beginning of the year. We have no reason to believe that this will change materially in the next few months. That's all we mean. That is not visibility. That is really confidence. As far as your second question, as far as Wines & Spirits is concerned, we mentioned careful inventory management. It is mostly in the U.S., in the Champagne business, where in some categories, we lack some bottles. It is particularly true for Veuve Clicquot.
We have not enough bottles, and we made sure that these bottles were left for the year-end season. A little bit what we did last year with Louis Vuitton happens this year with Veuve Clicquot in the U.S. and elsewhere. We have voluntarily retained some sales in the U.S., and the figures for Champagne in the U.S. in Q3 are quite negative, mostly due to Veuve Clicquot. We expect, obviously, this to recover in Q4 as the quantities available will be sold in the year-end season.
If I go back to your point on confidence rather than visibility, are there places where you are more confident than others, be it geographically or by divisions, or is this just the general environment has not changed?
The general environment has not changed. You saw from our figures that as far as the U.S. and Asia are concerned, which are our key strengths this year, the figures are not showing any signs of slowdown. We have a little bit of a slowdown in Europe, but I said a little bit. I mean, figures are not terribly different from what they were in H1, but are obviously at the lower growth rates than in the rest of the world. All in all, the environment in which we operate is not materially different.
Thank you.
We still have a question from Mr. Antoine Belge from HSBC. Sir, please go ahead.
Yes. Hello, Antoine Belge, HSBC. Three questions. First of all, to come back on these figures for Champagne, I would like to try to quantify the figures, especially in terms of volumes. I think you're mentioning that it was 6% at the end of the nine months compared to, I think, 10%, excluding Montaudon in the first half. So you quantified the decline in volumes. Second, on Fashion and Leather, an acceleration there. Is it for you an acceleration regarding more the end demand or more that you had a greater availability with the fact that you have one more factory? Any kind of sense between how volume evolves versus maybe a price on mix? Finally, I understand that you're confident, and certainly, your figures are very strong. Internally, are you changing the way you are looking at costs, and it must be the time for budgets?
I mean, are you sending a more cautious message, or at this stage, the way you're conducting your budget procedure is pretty much like in 2011?
Okay. Thank you for your three questions, Antoine. Starting on Champagne, the volume figures for Q3 were flat, actually, compared to last year. This is a bridge between the +10% we had at the end of H1 and the +6% that we have at the end of September. In these flat figures, we were down in the U.S. and to a lesser extent in Europe and up elsewhere. As I explained, the U.S. is mainly attributable to Veuve Clicquot and inventory management, I would say. As far as Europe is concerned, we have a lackluster performance at Mercier with some accounts being closed in the course of the quarter, which weigh on volumes. Obviously, the other part of that is that we get a positive mix impact on other categories. That's about the Champagne business.
As far as Fashion and Leather is concerned, I guess your question is mostly on Vuitton, as you were mentioning capacity constraints and demand. I think it's both. Demand is stronger, and we have the industrial capabilities to meet this demand to a larger extent than we were able to do it last year, hence better figures. In terms of price mix, on the price on the one hand and mixed volume on the other hand, it's, as always, reasonably well-balanced. Finally, budgets and the sense we take on budget. Basically, what we do is that we ask our brands and our managers to do as they feel. Basically, they feel well given the environment is pretty good and has been pretty good for quite some time.
The only thing we suggest is that they might have a plan B in case the economy would be and the environment would be different from what they and we anticipate. It's definitely a plan B. We don't want this to be a plan A, as we don't want this to become a self-fulfilling prophecy. We are, I would say, planning for the same type of environment in the months to come.
Okay. Maybe just a follow-up on Fashion and Leather. I've noticed that the U.S. accelerated quite significantly from 21% in H1 to 26%. Is this mostly related to Vuitton or are other brands also showing an acceleration in the U.S.?
It's all the brands, basically, that contributed to that performance. Louis Vuitton particularly, but the other ones as well.
Thank you.
We have a question from Warwick Okines from Deutsche Bank. Sir, please go ahead.
Yeah. Good afternoon. Two questions, please. Firstly, could you just say if you've raised prices in Cognac? I think you said at the first half results that you might look at it in the second half. I'm just wondering if you've done that or if you've planned that. Secondly, if you could just update us on your Hermès shareholding, please. Thank you.
For the Hermès shareholding, it's not materially different from what it was last time we spoke. As far as the Cognac price rise is concerned, we implemented in September, in most geographies except the U.S., a 3%- 5% price rise in the Cognac business.
Great. Thanks very much.
We have a question from Mr. Thomas Chauvet from Citigroup. Sir, please go ahead.
Good afternoon, Chris, Jean-Jacques. Three questions for me, please. The first one on Cognac, if I remember correctly, in Q2, your volumes were quite light in the U.S. After the price increase, you didn't build inventories in the trade. Can you comment on the selling and depletion rates in Q3 in the U.S., whether volumes have recovered? My second question is on Watches. Could you perhaps tell us whether the sellout is consistent with those selling numbers of 25% across most of your markets? In other words, are we in a similar situation, perhaps, as 2008, where inventory is building up in the trade? Thirdly, on the European growth of plus 7% that you report for the nine months, just want to understand, does it compare to the plus 8% you reported in H1, including the disposal of La Brosse et Dupont, or does it exclude it?
Because you're talking about a slight slowdown. I guess it compares to the + 8%. Just finally, on the FX, can you give us the hedge rate for next year on the dollar and the yen, please? Thanks.
Okay. Depletions in the U.S. in the Cognac business in Q3 were for the VS category quite flat. Basically, the same trend as what we've seen in the first half of the year, in line with selling. Selling and sellouts are well aligned and no change in inventory level, which is at a quite good level. As far as Watches are concerned, in the countries where we can monitor that, selling and sellouts are well aligned. We have no particular concerns with inventory buildup and the type of situation that arose in 2008. I may add that as far as the competition is concerned, we don't have a major concern on that front as well. Everybody seems to be pretty cool in terms of inventory buildup. For most brands, we understand that, as far as we can see it, selling and sellout are reasonably well aligned.
The situation on that front seems to be quite satisfactory. As far as Europe is concerned, the 7% figure we mentioned is consistent with the 8% at the end of H1. As far as Q3 is concerned, it's an 8% figure. Finally, on the FX, just on the dollar, on the dollar for 2011, which most of the part is now gone, it's almost 95% of the budget at $133. For 2012, it's 70% of the budget at $138. For the yen, we are talking about more or less the same percentage of coverage. It's JPY 113 for 2011 and JPY 110 for 2012.
Thank you.
We have a question from Mrs. Shamina Bhaidjy from Natixis. Madam, please go ahead.
Yes. Good afternoon, Chris and Jean-Jacques. First one will be on Watches and Jewelry. Am I right when saying that there's a slowdown in Europe on that division, and can you explain why and what happened? Same kind of question on Perfume and Cosmetics. There's a decrease also seen in Q3, and I guess it's mainly linked to Europe again. Could you help us on that? Last one is on China. Can you tell us what was the growth in Q3 in China? Thanks.
Okay. Watches and Jewelry, there's a slowdown in Europe. You're right. There is a little bit of a slowdown in Europe. The bulk of it is coming from two sources. One is South Europe with Italy and Spain proving fairly lackluster in Q3. The second source is Switzerland with the rise in the Swiss franc. This had negative impacts on sellout and therefore on selling. We've seen really softness in South Europe and in Switzerland. As far as Perfume and Cosmetics is concerned, it's a little bit the same issue, a little bit of a slowdown in Europe as well. We ended the quarter with more or less flat figures in Europe, slightly negative. Same sources as for Watches with the South of Europe being pretty soft. Also, skincare throughout most countries, not only in Europe, with skincare being also pretty soft.
Growth in China, as you've seen, our Asian figures are showing slightly higher figures in Q3 than in H1. China is more or less in line with what we did in H1. We see no signs of slowing down in China.
Okay. Thank you.
We have a question from Mr. Aharin Bassan from Mitsubishi Securities. Sir, please go ahead.
Good afternoon, gentlemen. Thanks for taking my call. Just two quick questions that I have here. I know it's a sales call, but can you comment at all on the cash flow as it's developed in the third quarter? The second question is whether the dividend that you're expecting to pay this year is going to be materially different from what you had last year. Thank you.
We don't release cash flow in Q3. We just release cash flow on semester and on yearly figures. I will not comment on that. As far as the dividend is concerned, we already announced an increase in July. We already announced an increase in the installment that we pay in early December in our dividend.
Thank you.
We have a question from Mrs. Louise Singlehurst from Morgan Stanley. Madam, please go ahead.
Hi. Good afternoon. Three questions for me, two, please. Just on Louis Vuitton, firstly, can you confirm if there are any price increases in the second half there? You're confirmed you're happy with inventory levels. Obviously, we had a few shortages in Q4 last year. Secondly, just going back onto the Wines & Spirits, I'm slightly confused on the volume progression that we've seen in Q3 for both Cognac. If you could give us color on U.S. and Europe, but also the Champagne's being flat in Q3 and where the weakness was there, please. Just on the third question, can you give us the European growth for Perfumes and Cosmetics, please? Thank you.
Okay. So price increases at LV . In the second half of the year, they were known as just as a reminder, we had two price increases in France and in related countries, i.e., basically Europe, of 3% in February and 2% in June. As far as the U.S. is concerned, it was 10% in February and 6% in June. As far as China is concerned, 5% in March and 6% at the end of June. These are the main price increases implemented in the first half, but nothing in the second half. As far as shortages are concerned, as I said, I think during the last call, our production capabilities are on the rise this year of about 10%, which should enable us to meet the growth in volume, but also to replenish inventory. We don't plan any particular shortage for the end of this year.
Second question on Wines & Spirits. I will try to recap on the volumes I mentioned. As far as Champagne is concerned, Champagne for H1 was up 10% in volumes. At the end of the year, sorry, at the end of September, it's up 6%. Therefore, volumes were flat in Q3, being down in Europe and in the U.S. and up elsewhere. As far as Cognac is concerned, it's very consistent. At the end of H1, volumes were up 8%. Same thing at the end of September. Hence, 8% growth as well for Q3. We have volumes in the U.S. being more or less flat, slightly up, and obviously, sharply up in Asia to average 8% for the quarter. Only, sorry, I missed your last question.
European growth in Perfumes and Cosmetics.
Oh, yeah. Sorry. It's - 1% or something like that. I mean, pretty close to zero.
The performance in Europe overall, obviously, we've seen the decline in volumes for Champagne are flat, but down in Europe, and then a decline for perfumes and cosmetics. Is that significantly different from what you thought it would be back in the last time we heard from you or back at the end of June? Thank you.
Champagne is mostly a one-off thing with the Mercier listing with hypermarket issues that we have in the course of Q3. It has a strong impact on volumes, but less so on revenues and even less on profits. As far as perfume and cosmetics is concerned, part of this was, how can I say, not expected, but anticipated. The softness of the South of Europe is nothing really, really, really new, and it doesn't surprise us too much.
Great. Thank you. One final follow-up, if I may. Just lastly, I think on Japan, you said it's recovering as expected. Is there any color that you can share with us by business division there as well? Thank you.
The Japanese business moved from - 6% H1 to - 3% at the end of September, which means that it was up 3% in Q3. Basically, Fashion, Leather Goods, Wines and Spirits were in line with this average. Watches and Jewelry were above, and Perfume and Cosmetics below.
Super. Thank you.
We have a question from Mr. Pierre Lamelin from Cheuvreux. Sir, please go ahead.
Yes. Good afternoon, Jean-Jacques and Chris. Two questions. Firstly, on Bulgari, can you share with us the organic sales growth of the brand in the third quarter? Secondly, can you provide us with the like-for-like figure at DFS, either over nine months or in Q3? Thank you.
Bulgari is in line with the rest of the division. The division was up 24% in Q3 in organic terms, and Bulgari was 24% as well. No major difference. Like-for-like at DFS is always a fully difficult concept, as we always do partial closing of stores or opening renovated areas, which normally have a significant impact on sales. If you take that aside, which is quite difficult, I think the growth of the like-for-like growth of DFS is a growth significantly above 20%.
Okay. Maybe just a follow-up on the number of Vuitton stores as of Q3, around 450?
No, no change compared to the 1st of January. I mean, there were openings, but there were closures as well in the same amount.
Thank you very much.
We have a question from Mr. Paul Swinand from Morningstar. Sir, please go ahead.
Good afternoon, and thanks for taking my question. I'd like a follow-up on the Jewelry and Watch business. Looking ahead towards the growth, you've obviously got strong growth today, but now you've seen a little more of the integration, or you've had six months to look at Bulgari. Where do you see growth coming from in the future? Is it more store growth? Do you think you're going to change the product mix? Obviously, in the last six months, you've had some pricing increasing. How do you see that playing out over the next several years?
Okay. Very difficult question. You have to differentiate watches and jewelry. I mean, the dynamics are not the same as watches in the wholesale business and jewelry, mostly a retail business. As far as Jewelry is concerned, let's make it simple. I mean, it will come from a higher sales density, so higher sales per sq m due to the improvements for all brands in the offer. That's an ongoing process which has been going on for quite some time now and which we expect to go on in the future. At the same time, the expansion in the number of stores. These are the two main growth drivers in this business. As far as watches are concerned, there are several elements in that. The first one is obviously growth in volumes.
This is an industry, if you look back seven or eight years, where volumes have grown significantly and the market demand is booming for luxury watches. Prices have been increased significantly by most players, but also bear in mind that the prices have to reflect the rising cost of inputs, particularly gold, diamond, etc. These are the two main drivers, but also you may take into account retail. Most of our brands are opening retail stores, and we expect this to be a booster for the sales of this category in the future.
Would it be fair to say sort of an even split? You're not pushing on one part of the business versus the other?
No, we are not. I mean, we are pushing on all the levers I just mentioned: volume, price, retail, and number of stores and sales densities, as I said.
A question on the Spirits business, particularly in China. There are a number of local brands in China that seem to be doing quite well as well. Do you feel that you're still gaining market share as people shift their tastes and preferences more towards European brands, or is it still maybe just a rise in the total market for alcohol consumption and high-end brands?
It's a large market and a fast-growing one. The imported, what we call imported spirits, mostly whisky and Cognac, are gaining volumes. I don't know whether they are gaining overall market share. It's very difficult to say because there are no reliable statistics in China on the various spirit categories. It is very clear that these imported brands are making their road into China and enjoying strong volumes. Obviously, we are part of that, and we are benefiting greatly from this trend.
Thank you again, and good luck.
We have no further questions for the moment. Ladies and gentlemen, I remind you that if you wish to ask a question, you have to press zero-one on your telephone keypad. Thank you.
Okay. If there are no further questions, I will make just two or three closing remarks. The first one is I would like to highlight the strength of our brands and our business model, which enabled us to generate another 15% organic growth in the third quarter in line with our first half performance. The second point I would like to make is that we all know that in the current environment, most people are looking for reasons to be worried rather than to be optimistic. We are very proud, obviously, to disappoint pessimistics as our businesses, by and large, continue to operate in the same environment as they have since the beginning of the year. The final remark is about the road ahead of us. How does it look like? Obviously, we have almost no order book.
As I said before, our future view is as good as yesterday's sales. Yet the current strengths of more or less all our businesses and all geographies nourishes our confidence for the future and our ability to make further advances on the luxury market. That is all I wanted to say. With this, I conclude our quarter three sales conference. I look forward to discussing with you for your figures in early February. Goodbye.
Ladies and gentlemen, this concludes the conference call. Thank you all for attending. You may now disconnect.