[Foreign language] Good evening, ladies and gentlemen, and welcome to this traditional annual meeting presenting the performance for the year 2011. I apologize, I'm going to be a bit repetitive, but 2011 was an outstanding year, just as was 2010 and just as will be 2012, at least let us hope so. The revenue was up 14%. The profit from recurring operations was up 22% with a record level of more than EUR 5 billion. We have an improvement in the current operating margin. The interesting thing here is to discuss the present year, but of course, you're interested about future outlooks. Let's first take a look at the performance for 2011. 2011 for LVMH was very eventful because, of course, we were able throughout our lines of business, we were able to generate growth in every single line of business.
As you know, there were all sorts of developments in 2011, and of course, the main event, main event in terms of business, is a rapprochement with Bulgari, Mr. Trapani, who is now running our business for watches and jewelry. We've known him for about 10 years, and for the past 10 years, we've been trying to finalize this merger. This occurred in 2011, and it is a major development because, first of all, Bulgari is a remarkable brand, and it is for LVMH a new stage in watches and development, and we can be a challenger for the number one in the industry. This is extremely exciting indeed, all the more so because we have very fine teams in all the brands of watches and jewelry.
The fact that we're able to make such significant strides, especially in 2011 with TAG Heuer, Hublot, Chaumet, we were able to make great strides, and these brands still have more potential in the present environment. Our strategy, and I mean, this may be a bit disappointing, but we're continuing to sell the same strategy. Our strategy is based, as you know, on creating iconic items, original items, and the expectation is for our workshops to produce these items with very high quality standards. The team with the Bulgari team, which Mr. Trapani had trained and set up for a number of years, is of course an excellent asset because now we have not just the quality of our products, but the know-how both for jewelers and watchmakers. This is a tremendous development in this line of business. The outlook is extremely promising as well.
2011, as you know, outside Europe, was a year of prosperity around the globe. It sounds a bit paradoxical to note that even in 2012, global growth is expected to stand at about 3%, even though we're expecting no growth at all in Europe. We're fortunate enough to export most of our output. Therefore, most of the export countries are not just the emerging economies, but such countries as the U.S. , driving most of our business. This also applies to Fashion and Leather Goods because, as you know, we were very successful there as well. We have been very successful for a number of years, especially with the Vuitton teams. Yves Carcelle's team have made Louis Vuitton a global leader in luxury.
Of course, the outlook is just as exciting as always, even though this may be surprising to some because when we took up the business early in the 1990s, at the end of the 1980s, we were told, "Well, Vuitton is already saturated over the planet. So the prospects for growth are somewhat limited because there's already too much of it." Ever since then, the revenue has multiplied by a factor of 10. Even though the purpose is not to grow indefinitely, we multiply more than tenfold. Mr. Carcelle can give you more details about that. In any case, the reason we were so successful in 2011, the reason why we have such a positive outlook for 2012 is that Vuitton is capable of reconciling, on the one hand, high revenue and very high and elite quality products.
Of course, some of the items are manufactured in very small numbers with very high demand. This means that, of course, the waiting lists keep growing around the globe. Reconciling these two high quality and high revenue objectives has made us successful. Of course, as analysts, maybe you don't buy all our stuff, but you certainly are familiar with our catalog, and there may be a few surprises. Indeed, we have something of a surprise in store with the new artist that we will be displaying shortly. A number of iconic stores were opened in 2011, especially the store in Milan, but also the store in Singapore, which we'll be visiting next week. That store is built on an island in a complex known as Marina Bay. This is one of the most exclusive luxury goods stores in the world.
It is, of course, iconic for the entire Asia region, iconic of our brand. It's not just Louis Vuitton in Fashion and Leather Goods. As you know, for a number of years, you analysts have been asking questions and have been turning to our team, saying, "Vuitton is a fine brand, and so is Dior. What about the smaller names, the smaller lines of business?" Let me tell you that we're very pleased to note that all of them are doing well. Indeed, they're doing extremely well. When I was asked, I was repeatedly asked how fast this could develop. We said that this can't happen overnight. If that could happen overnight, we would be overtaken by events. This is an ongoing long-term process requiring lots of effort to get the small names going and growing. We need to find the right combination of good management and good products.
We're able to do just that with Yves Carcelle's teams in a number of areas. I'll give you just two examples, but there are many, many others. The first example is the Spanish brand Loewe, which we bought a number of years ago, which was somewhat problematic in the beginning. With the right combination of creativeness, new design, new concept stores, and top quality management, we were able to develop around the world, especially in the Asia markets. The other striking development is something that we took up back in the 1980s. You have to be patient indeed. This takes us back 30 years. This was a business that was doing so-so, but now has taken off dramatically. That's called Céline. Everybody knows Céline now. Thanks to the talent of the creative woman in charge of this business, we are generating remarkable growth numbers.
When these shops are sitting next to competitors supposed to be very successful, we'll find that the Céline stores are generating more revenues, in terms of per square meter, but also in absolute numbers that Céline is doing better than its biggest competitors. Even though we have about 100 stores or so under that brand, it's doing extremely well. I'm not saying that there will be more Louis Vuitton in the future, but at least we're certainly expecting new businesses of the same ilk. We are extremely well positioned, even though we can't rule out the possibility of there being ups and downs in the international economic climate. It may sound paradoxical seen from here in France or indeed from Europe, but this is a very promising outlook. In 2011, we were all very pleased with our performances, especially in Perfumes and Cosmetics.
The Dior Perfumes in 2011, once again, of course, the first time was in 2010, but the Dior J’adore is the number one perfume in France ahead of all the other names. This is quite remarkable. It was launched in the 1990s. It's an emblematic perfume. The whole concept was born out of the history of the Dior company. Mr. Christian Dior with his initial store and the shape of the number eight. It's a very exciting and convoluted story, but the very development of that, the bottle and the perfume itself is very much emblematic of that name. Dior J’adore did extremely well. Likewise, Shalimar by Guerlain has been extremely successful and by and large our perfume business, even though in a very competitive environment, has been doing extremely well. I mentioned watches and jewelry. Let me also mention Selective Retailing.
Of course, Selective Retailing includes basically DFS and Sephora. Sephora, as you know, is a rather unique brand. It is undoubtedly the largest retailer of Perfumes and Cosmetics. Christopher De Lapuente is now running that company. I don't know if he's fully in control because he's only been around for a short while, but the performances are extremely satisfactory. What makes this concept unique is that on a number of markets, whether in mature markets such as the U.S. , where we are leaders in the selective retailing of Perfumes and Cosmetics, or in China, new emerging markets, we are doing just as well. These are growing markets, and we're constantly innovating. That is one of the features of that name. We're constantly innovating. We opened a new store in the Meatpacking District in New York. It looks almost like an Apple store. Of course, we're not buying computers there.
People buy Perfumes and Cosmetics. When it comes to paying, there are no checkout counters. You pay with a small terminal carried in the hands of all the salespeople. It's very effective, and it's doing extremely well. Now, DFS, as you know, DFS is just completely submerged with our Chinese customers. Looking back to 1997, because I'm getting some experience in this business, back in 1997, I do not know if you recall the situation with Hong Kong and China. At the time, the only Asian clientele was Japanese. There we were in 1997, the handing over of Hong Kong. No more Japanese customers because they are afraid Hong Kong is turning back to China. We may need to close down the DFS stores in Hong Kong. No more customers. That's the end of the story.
The same was said about Sephora in the U.S. , by the way. In any case, this was DFS. At the time, I thought it seems a bit unfortunate to close down these stores, especially when they are well positioned. Let's renegotiate the rents. As you know, the economic situation in Hong Kong has ups and downs. We were able to renegotiate the rents downwards, down 50% or 60%. We kept them that way. Now these shops are just splendid in terms of customer-ship, in terms of the quality of the products sold there, because, of course, our Chinese customers are very much interested in high-end articles. The performance of the company is extremely good. This company has had its ups and downs, but now it's definitely, look, it's on a very positive trend.
Now, Wines and Spirits, as Mr. Navarre is a bit concerned, usually we start with Wines and Spirits. Christophe Navarre is a bit concerned now. The nice thing about Wines and Spirits is we do not need to innovate every week. With Wines and Spirits, we're dealing with traditional products. These are standard products. They're not exactly the same. Of course, there are some small innovations, but there's no revolution. It's not every day you come up with a new Cognac or a new Sauternes. We have to sell our Wines and Spirits. They have to be the stuff dreams are made of, but that's all very well. We have to manage, we have to produce the stuff. When I see Mr. Navarre, he says, "No, we haven't got enough bottles." He is right. We could generate better numbers with our Cognac, our Champagne, or indeed with other brands.
We simply haven't got enough inventory, especially in Asia with the Cognac. The demand is greater than supply. We have a fine strategy. We have a fine team. In the year 2000, we were able to renew all our sales forces around Asia. These are very promising, very strong markets. Unfortunately, there's only so much we can do. Only so much we can produce. We have these technical limitations. That is why in 2012, we could only stick to a moderate growth in volumes, which is out of our control. Some of the market was left to our competitors who were able to step in. I mean, we don't like it, but what can we do? There's only so much Cognac we can make. The performance in 2011 is outstanding. The outlook for 2012 is extremely positive for Wines and Spirits.
I mean, we're dealing here with a very solid business. Looking at other lines of business which require more creativeness, across the board, we can be extremely pleased. We have to remember that the group-wide strategy is to create fine products, ensure that the products meet very demanding quality standards. We want the products to be delivered in a timely fashion in terms of perfection. These products have got to be as good as they can possibly be. They have to be sold in a satisfactory, pleasant way, sometimes a playful way as well. We can see that in some of the stores. This has been our guiding spirit over and beyond the numbers. Of course, the numbers for our auditors, for our accountants, and all this are essential. We need these people.
Otherwise, our share price wouldn't go up unless we provided you with all the very detailed numbers of our balance sheets. The foreign exchange hedges are very, I mean, I don't understand the first thing about this. I don't know if you understand anything about what Mr. Guiony says, but this, I understand, is to do with developments that you only find out after the fact. Our auditors can usually work it out, but it's a thank God these hedging operations do not involve large sums of money, but all the same, you have all sorts of complicated accounting going on. That is, in a way, part of the story. Our strategy consists in producing fine products for fine customers. Of course, when the financial results, the financial results, of course, are a consequence of that. We have to be as explicit as possible about our financial performance.
Now, talking to Bulgari, we were asked, "Would you engage in external growth in acquisitions?" The usual answer is no. We normally are happy to grow organically, but you have the occasional acquisition, the occasional opportunity for our external growth. Even though Bulgari was an expensive acquisition, we survived all right. Our debt ratio is still at 20%. We are quite all right. The acquisition of Bulgari is an exception rather than the rule. In any case, there are very few names as beautiful as Bulgari. That could have well been the last of its kind that was up for grabs, as it were. Our strategy, our methods have not changed, and we've been very successful. There's no reason to change our strategy or our methods in 2012, bearing major disasters.
In spite, indeed, of the difficulties encountered in Europe, and they are very much to do with the situations that everybody knows about because issues of public debt, monetary issues, budget imbalances, etc. Nonetheless, the globe is growing in terms of what the global economy is growing. Of course, we want to make the most of that. Indeed, the trends haven't changed since the end of last year. We are on the same trend. We are reasonably confident in the year 2012. Now, without further ado, Mr. Guiony will give you details about the numbers for 2011.
[Foreign language] Thank you, ladies and gentlemen. Good evening. A few words on the key financials for 2011, starting with revenue, and then I'll move to the financial statements. First Slide on revenue, the details quarter after quarter, how things progressed.
Starting on the right of the Slide, you can see that we had sales growth at EUR 23.6 billion, 14% on organic, 4% linked to scope in Q2, linked to the consolidation of Bulgari and Ile de Beauté, and a negative currency effect of 2% throughout the year. If you look quarter after quarter, you see the currency effect was fairly erratic. We went from positive to negative quarter- after- quarter. Scope effect appeared in the second half of the year. In organic growth, which is far and away the most important point, you can see it's fairly flat between 12% and 15% across the various quarters. The 12% in Q4 seems to mark a slowdown. In fact, that's not the case. I'll return to that later, but there's a one-off effect that I'll detail, which accounts for this relative. Many people would be happy with 12% organic growth in the current context.
This relative slowdown in growth in Q4. The split of sales by geography, I'll go through this quickly because this split doesn't change very much year after year. We can note an increase in Asia two points, Europe and Japan down at one point each. Aside from that, it's pretty flat. The three-quarters balance between the three major areas respected. Sales by region, interesting given the current turbulence. We can start with the two areas that prompt no particular comment. The U.S. and Asia have highlighted the Q4 trend to detect any slowdown in these two areas. That's not the case. U.S. growth flat. High growth, 18% for Asia, ditto. At an even higher level, because across the year, we've booked 27% growth rate. A word on Japan, you can see favorable uptick, favorable versus the dramatic events in the first half that I won't return to.
At the end of June, we were down 6%, Q3 up 3%, and Q4 2%. We end the year, given seasonality, close to balance. We'd anticipated this. We're happy to see that this was achieved. The rebound capacity of Japan will always surprise us, but displayed itself vigorously. Europe, lastly, average growth of 7% across the year. Not that bad given the current climate. 8% at the end of September, 3% in Q4. What you need to realize is Q4 was affected by sales that took place in Q4 of the previous year, 2010, in November. But by Lent, we sold ships that had been filled for our own account, and that had a heavy impact on quarterly growth in Europe. If we eliminate that growth effect, we're at 7%. In fact, there's no slowdown in Q4 in Europe.
We're on a 7% trend as for the rest of the year because the average is about 7% or 8% if it's restated for that effect. Restated for that at group level, the 14%, rather the 12% that I mentioned earlier for Q4 would become almost 14%. You see here, there hasn't been any manifest slowdown in trend. Same thing. That's the split of sales by division. I'll say a word about organic growth. You see that we had organic growth levels double-digit across the board, pretty much. Wines and spirits, volume growth up 6% with the mix and price effect led to organic growth of 10%. Very strong growth in fashion and leather goods, 16%. Perfumes and Cosmetics, almost double- digits. Watches and jewelry, the highest figure in the group of 23%. Also, a very sustained number in terms of organic growth. In selective retailing, 19%.
That's how we see the split of the 14% that I mentioned on the first Slide. Same assessment, but highlighting Q4 this time, which shows you how the end of the year unfolded. As on the geographies, no manifest slowdown in Q4. You see wines and spirits are exactly pretty much precisely on the annual trend. Fashion and leather goods acceleration, 18 in Q4, whereas we are only 15 at the end of September. A slight slowdown in Perfumes and Cosmetics. That's the case, notably in Europe. The prudent inventories in the U.S., such that the number of the growth, rather, is relatively down in Perfumes and Cosmetics in the U.S., but starting the year on a sustained note. Watches and jewelry, high level success. Selective Retailing, organic growth, 19% throughout the year. Very remarkable.
Other activities that I don't share, -15%. T hat's the Royal Van Lent impact that I mentioned earlier that accounts for the 12% organic growth in Q4, which is closer to 14% if it's restated for that effect, as I mentioned. Moving now to the income statement, I won't comment sales. We've said that gross margin up 19%, whereas sales 16%. Gross margin is up to 56%. That's a 1% increase. Those to the discount reductions, the share of sales in Fashion and Leather Goods, the share of sales is down. Céline, for instance, that Mr. Arnault mentioned, sold pretty much 100%, achieved 100% of its revenue without in sales. That has an impact on gross margin. Selling marketing expenses trending with revenues. If we remove the currency impact in that, marketing expenses within the selling expenses in this presentation grew by 16%.
Commercial, the cost of our distribution network, stores, wholesales up 16%, and admin up 12%. This trend slower than gross margin boosted 22% of gross operating profit. There again, the margin is up 1% to reach 22.2%, which is a record in the history of the group. Other income and costs, so there are intangibles there. We had a cost of EUR 100 million. We plan a future reduction under this item. I won't detail the financial income. That changes a lot. That's because we booked income on the Hermès equity swap. More about that. Corporate tax flat. 30% tax rate is against 31%. Minorities up because of the strong increase in Wines and Spirits and DFS. Net income, which looked flat, but up 1%.
In fact, if we remove the EUR 745 million net profit booked last year on Hermès, it's up 34% if it's restated from that effect, which is, of course, a one-off. A word on the split of profit from recurring operations by business group. You can see that all business groups are posting double digits. The growth of profit from recurring operations outstrips revenues in euros. Take Wines and Spirits. Revenues up 10% for profit from recurring ops, which is up 18%. That's a margin improvement of 2.7% in Wines and Spirits. That's a record for the group. Fashion is the same. 15% in euros, 20% in growth profit from recurring operations. Watches and Jewelry, there's the consolidation of Bulgari retailing. Sales are up 20%. See the profit up 34%. That's a very favorable trend.
A word also on how this profit from recurring ops with the currency and scope effects to distinguish it from organic growth. Currency impact, there isn't it? We have EUR 7 million upside in currency effect for the year. Currencies trended negatively. Dollar was down 5% as to what it was in 2010. Currency hedges that are perhaps rather fuzzy for some, if I understand it well, gave us a strong offset because the currency impact is neutral for the full year as to the scope. It's the consolidation of Bulgari, which brought in EUR 87 million in the second half of the year. Total organic growth allows us to our profit to grow by EUR 848 million. A word on financial income. You're familiar with this. Four items. Cost of financial debt is flat. Involves several developments. Average debt is sharply up following the acquisition of Bulgari in particular.
14% increase in average debt. Rate decrease both on gross debt. We go from 3.2% to 2.7%, linked to the rates and spread decrease, but also a higher return on cash. That was one of the problems in 2009 and 2010 when cash yielded nothing. That situation is improving slightly. The effective portion of currency hedges, we expect it to be down, but in fact, it's flat. Sorry to bring gripes to Mr. Arnault's mill. He's not wrong. I mean, this item is totally unpredictable. What happened is that the dollar grew sharply. The euro was down at the end of the year. That accelerated the booking of our currency hedges so fast that we booked more than we'd actually spent, which is rather absurd.
I hope that one day IFRS will have a logical way of treating this, but we booked a cost expense higher than that incurred in putting in place the currency hedges. I think we can be confident that in 2012, this item should decline. Financial investments, the result there is sharply up. Last year, there was EUR 1 billion gain on the unwinding of the Hermès equity swaps. The item others is up because of the booking of dividends linked to the stake in Hermès that are booked here. In total, quite a strong development in financial income. As to the balance sheet, it hasn't changed quite considerably. We've had major transactions. There was the Bulgari transaction, which led to an increase in equity. We had EUR 2 billion capital increase. The shareholders' equity was favorably impacted by the increase in the Hermès share price.
We no longer book anything in the P&L and the Hermès stake. All the shareholdings in Hermès are reflected in the change in shareholders' equity. There was an increase of EUR 1.4 billion linked to the value increase in Hermès that was directly booked at shareholders' equity. Net debt increased. More about that in a moment. Also, high increase in inventories. Two things. We had to rebuild, as Mr. Arnault mentioned earlier, rebuild inventories linked to the growth in operations. Of course, the consolidation of Bulgari jewelry activities are quite intensive in terms of inventories. Our financial structure is very healthy. Balance sheet, you can see shareholders' equity, 50% total balance sheet, which places us in a very favorable situation. Cash flow is detailed on the traditional chart. The cash from operations, EUR 639 million, 17%. It's up slightly less than the profit from recurring operations because of taxes paid, not booked.
We had major reimbursements in 2010, which didn't reoccur in 2011. We dispersed far more taxes in 2011 than in 2010. Nevertheless, it does exceed EUR 4 billion. That's a 17% increase. Not bad. Changes in working capital requirements, significant. Last year, we had an abnormal figure to have such a figure in working capital was abnormal. We have a consolidation in a year of high growth. We have to build up inventories and be able to fund our receivables. That figure of EUR 534 million isn't too surprising. CapEx investments sharply up more than what I indicated to some of you last year. In fact, we booked within these investments a number of real estate transactions. We had some opportunities this year that we wanted to see. It's about EUR 500 million in transactions that are one-off.
If you restate available cash that is down at EUR 2.2 billion from this trend that's rather exceptional, we end up at a level that's not too different from the 2010 number, which was quite exceptional. Debt shown on the Slide. It's increased sharply, gone from EUR 2.7 billion-EUR 4.7 billion. EUR 2 billion debt increase linked essentially to the increase in dividend and also with the Bulgari transaction, which led us to disperse EUR 2.2 billion. That's a normal trend. As Mr. Arnault said earlier, 20% of shareholders' equity sharply up at 23.5%. This debt, 20% of our shareholders' equity, leaving us with a satisfactory financial situation. EBITDA higher than EUR 6 billion. The debt to EBITDA, that's just under one year, which is very favorable. Final point, the dividend we're going to propose to the shareholders' meeting to agree 24% increase at EUR 2.60. We paid an interim at EUR 0.80 in December.
Over five years, as you can see, the annual growth on average is 13%. This number, including two years, 2008 and 2009, or 2009 and 2010, stagnation because of the crisis. This is a favorable trend reflecting our policy in terms of shareholder return. Thank you for listening.
[Foreign Language] L adies and gentlemen. Now we can take your questions. If there are any questions, please introduce yourselves. I took a pretty new question.
Sir, thank you. Bertrand Pinault, Opération Financière. I'd like to discuss this EUR 2.2 billion operation on Bulgari, Mr. Guiony mentioned. Was that the price of the equity allocated for this acquisition, or is there on top of that Bulgari's debt?
There was hardly any debt. There was a bond on Bulgari, convertible bond, but it was converted prior to the acquisition. We bought a company which had hardly no debt, no cash. The total price was EUR 4.2 billion in equity and EUR 2 billion in, by issuing a bond on the market at the time on the takeover bid. EUR 4.4 billion and the debt, the bond is about to, no, it's EUR 4.2 billion and EUR 2 billion in debt.
The cost of the debt on this acquisition, it is fungible. That is, if we have 3.2%, but there's no reason to believe that Bulgari's specific debt should be more expensive than the average debt. You said there was no cash in Bulgari. Thank you.
Good morning. Good evening. Antoine Belge, HSBC. I have three questions. Number one, regarding Bulgari, can you expect a new strategy regarding watches? You may remember that you overperformed the industry. Are you endorsing the strategy that was conducted in accessories in Bulgari over the past two years? In Wines and Spirits, you mentioned the fact that it was difficult to generate additional volume. Will there be an issue in terms of capacity for watches? I believe that Swatch is going to reduce some of its deliveries. Bulgari and TAG Heuer are big customers for the Swatch timepieces. You have underscored the quality of management at LVMH. Is it not surprising to see that the successor to Mr. Yves Carcelle is not from LVMH?
[Foreign language] Trapani. Good evening. Regarding the first question on strategy, of course, the strategy was confirmed in all types, in all categories of products. Of course, we instead insist on producing high-end articles, and the strategy is going to remain the same. Regarding the relationship with Swatch and suppliers, we are looking to a significant increase in business in watches. Now, of course, there's less supplies coming from Swatch, and that's the reason we've been investing aggressively in our own in-house production of timepieces. Of course, we're balancing external suppliers and our own suppliers. Regarding Mr. Cartier's successor, the only criterion that guided us was to find the best possible manager for the job. There are in the company some extremely competent people who can take over such a business as Vuitton, but they already have very successful activities, and they are in a very ongoing trend.
We needed somebody who was available to take over the business. Even if that person doesn't come from the group, we felt it best to have somebody who just could do the job. It's just like creators. We are asked, why not choose French artists or people working for your companies? The answer is always the same. We need to find the best, and getting somebody who seems to have the necessary skills to generate business, somebody indeed from the outside, can also bring fresh blood to the business. You have to remember that Vuitton is a complex business. It was run for about 20 years by Yves Carcelle, and Yves Carcelle will be training his successor for a long period of time. I'm quite pleased with this new acquisition, this new manager.
Are there further questions? Yes, sir.
Marc Willaume, Raymond James. I have three questions. Number one, regarding the pricing policy for 2011, these price increases were responsible for part of the growth. What are you expecting for 2012 in terms of dismissions in shopping malls? EUR 300 million, I believe. Some of the new stores were opened by your group, Group Arnault, in Shanghai and some in the U.S . Are these things that were taken over by LVMH? On Louis Vuitton, you mentioned a number of new products for 2012. Can we have details, please?
[Foreign language] On pricing, as you know, it's always rather difficult to generalize. The year was marked, as was the end of 2010, by strong demand and some tension on the supply. Obviously, that's a favorable background to increase prices. We can't generalize. Some markets are convalescing. We mentioned the brilliant results of Wines and Spirits. They're already at the beginning of their ability to hike prices. They benefited from a volume effect, not so much from the price effect that will take over in the second stage. For a business like Vuitton, the price effect was more significant. It's a favorable context, but I don't think we can generalize on that point. Shopping centers are locations where we have stores. For example, we acquired the building in which we have the Louis Vuitton store on Bond Street, to secure this location long term, which was one of the finest in London.
That's what the investment consists in, essentially. They're not shopping centers that are developed in another structure. As to Vuitton in 2012, I believe the outlook is excellent. Perhaps Yves Carcelle could say a few words on that.
[Foreign language] As you know, there's no change in strategy for several years now. We'd reduce the number of net openings, however, we increased the quality, the size, and the appeal of our stores. A few days ago, with Mr. Arnault, we opened the store in Rome, spectacular, in a former cinema. The oldest cinema in Rome, that opened in 1907, closed in 1991. It took us six years to negotiate with the city to build something absolutely outstanding. One of the major initiatives of the year will be the opening of the Place Vendôme store. Not just a jewelry store, but also in the same building, there'll be a workshop for high-end jewelry, securing know-how, going upmarket, and contributing, participating in a very small club of the leading jewelers of the Place Vendôme. A few months ago, as you know, we acquired the Fabrique du Temps.
That's a watch factory in Geneva. We announced a few weeks ago that we plan within the next year or so to combine in Geneva all the watchmaking activities of Louis Vuitton, the assembly unit that's at La Chaux-de-Fonds, and La Fabrique du Temps, that's making the movement. That illustrates once again controlling our know-how. It's in full coordination with our friends from the Watches and Jewelry division. It's the continued strategy. Rather store reopenings, bigger, more spacious, consistent with the growth of our various businesses.
[Foreign language] Hello. It's de Varannes from Soc Gen, I also have three questions. Could you perhaps explain why margin in selective retailing for the second half is down? We had an improvement that was quite spectacular in the first half. Second question. Across the year, we see Perfumes and Cosmetics margin doesn't improve, even if there's good organic growth. What's happening? The campaign with Charlize Theron didn't generate the expected result. You said Bulgari is probably the last opportunity. That's rather surprising. Have you given up on Hermès?
[Foreign language] Just before Jean-Jacques Guiony answers the first point, the campaign with Charlize Theron is an amazing success. You probably saw the spot. I don't know what you think, but we're going to win an advertising accolade. I mean, it doesn't mean anything, but nevertheless, since we launched this advertisers' campaign, we've boosted sales spectacularly. We're well ahead in France. Last year, we were just a few hundred thousand euros ahead. Number two, it's another. Now it's not another number, but now we're streets ahead.
[Foreign language].
No, no, that's for other reasons. Jean-Jacques will explain. No, no, the campaign costs, but no more than any other. It does, I think, have an impact. In fact, I'm sure it has quite a spectacular impact. On distribution.
On selective retailing, yeah, margins are down. I think it's 0.2% in the second half. It's not very considerable. If we remove the impact of the consolidation of Ildebote, which is far less profitable, at least for the time being, than the rest of the business, margins are up slightly less than the first half, but they are up significantly. As regards Perfumes and Cosmetics, there you have to detail by half. Margins are down in the first half, but up in the second half across the year. If we remove the effect of deconsolidation of LBD, we have margins pretty flat or slightly up. You'll recall that in 2010, we had 70% growth in earnings linked to the fact that we benefited from a favorable environment at the time. We hadn't resumed the commercial investments. We were just coming out of the crisis.
This effect impacted on margins in the first half. The second half, with the investments that generated revenue and didn't cost, we found a more normal situation, a margin increase. Two separate situations in the year in terms of comparison.
If I may. Yes. I think the strategy, we've always said, was strategy was to have growth ideally above market growth this year with organic growth of 9%. We've done that. We also have CapEx to drive that growth, but also more one-off CapEx such as the launch of a perfume such as Fendi or expanding certain brands in Asia that are weighing on the P&L. Okay, increase is slight. I agree, but it's always in the right direction. On this, nothing's changed. We never had the intention of assuming control of Hermès. How could we pretend to take control of a company that is 70% owned by the family? It would be something of an illusion.
I mean, Hermès is a friendly stake shareholding that is done for reasons that are purely financial at the outset that have become more strategic in which, and in that shareholding, we have no will to show hegemony. I mean, if one day the light emerges and we're asked to provide assistance, help, or advice, or just synergy, we're prepared to do that. If not, we're a minority shareholder, relatively satisfied to see the way the share price is increasing. We don't quite understand why it's rising so sharply, but it's better that it's in that direction.
You're happy with the situation for the mid to long term?
Absolutely. Yes.
If there's no opportunity left in the group, irresistible. That was your, that was the term you used last year. We've understood that Bulgari was irresistible. What are you going to do? I mean, the group has never been in such good shape. It's never generated so much cash. What are you going to do with it?
These are rich people's problems. We're going to think about that in three, four years. Take the example, certain firms. Take Apple. They still have far more cash than we have. We still have some room to catch up. They don't seem to be overly worried about it. Cash is not a major concern.
Would you want to increase the dividend, have a one-off dividend share buyback?
I don't know. We have cash. You're an embarrassment of riches. Yes, it's better to have too much cash than too much debt.
Nicole Vulser.
Nicole Vulser, Le Monde. Earlier on, you were referring to numbers that were unfathomable. I do believe that there were some equity swaps that were unfathomable. Do you have other equity swaps in other businesses like Hermès, in other companies, which may or may not be explained? It was unfathomable to me. They may not be new. Financial analysts conduct very lucrative investment operations. These equity swaps were at the time nothing more than a financial operation and nothing more than a financial operation. I must confess that I have plenty of admiration for Mr. Guiony. He maybe has similar operations up his sleeves. He may not tell you about this because if we tell you, then it might upset the share price.
I have to disappoint you. We have no other equity swap than on the LVMH share, and we have a few of these for purely hedging purposes.
Regarding Lusardi , which is very topical indeed, is that a new role for your subcontractors to come and step in and help industrialists who are encountering difficulties?
Well, Lusardi is an operation where we, I mean, and I explained this earlier, where our intention was to increase our capacity. It turns out, it happens that every year we hire a number of craftsmen in France, either directly in our own workshops in Louis Vuitton or through our suppliers or subcontractors. Indeed, the company is one of our suppliers. When the opportunity arose and that supplier told us, "Look, I am in a position to increase my capacity by saving jobs," I felt it was the right thing to do. It was indeed our own interest to give the go-ahead. What I have found, and indeed, the idea was nothing more than that.
I have read funny things here and there, but the purpose was to invest. This was an opportunity to help one of our partners and increase our capacity. The one positive development in the whole business is that when we open a splendid workshop in the Drôme in Marzas, like we did in 2010, and we invite our journalist friends to come and have a look, and we show them that the project is splendid. Usually, we see nothing in the newspapers, neither in the daily newspapers nor on the breakfast show in the morning. For this business, for once, the papers have been looking at this investment of LVMH that is saving jobs. I suppose that's one of the positive side effects of this capital expenditure, that we are there. Apart from that, we're delighted that we were able to save 90 jobs in the area.
Yves, I believe there was something about Marsaz. We did write something about Marsaz. Was it the supplier who came knocking on the door for this operation to suggest that you should buy up?
Y es, that's what happened. This is a supplier we've been working with for a number of years, yes.
Are there further questions? If I see, hang on, hang on. There's another question.
Adrien Cahuzac from L'Usine Nouvelle. Could you tell us about your plans for 2012 in terms of production capacity in watches and jewelry?
We can't really give you too much detail, but as you know, we manufactured parts of the timepieces, the movements, the bracelets, the boxes, and lids. We are working on other components as well. This is something we're developing. The other aspect is we're announcing new products. That's one thing. We need to make part of their own production because some of our suppliers are falling short.
Yeah. Thank you. One more question.
Hutchings from Goldman Sachs. Thank you for accommodating me at the end here. Just one question on a smaller part of your capital spend, which is in L Capital. I wonder if you could give us an update on the strategy of the kind of businesses you're looking to buy. There seem to be lots of headlines at the moment about L Capital's activity. The second question was just a little bit about the trends. You've had a fantastic year in the U.S. as well as in Asia. I wonder what your outlook is. Are these sustainable levels of growth that you're seeing in the U.S. at the moment? Thank you.
You don't mind I speak in French? If you have the translation, I will answer in French. Regarding L Capital, L Capital is an investment fund with a number of partners. It's a private equity fund where we have a number of partners. The strategy of L Capital, ever since its inception, I think this is the fourth or fifth fund run by Daniel Piette. I don't know if he's in the room. Maybe not. That was not the purpose of this meeting. The whole purpose of these funds, rather, is to invest in companies that cannot be part of LVMH because these are brands of a different standard, looking more at the general public, the mass market, looking at brands that are more mid-range than high-end. We can invest in these brands through that fund, but with other partners.
In fact, we are only a minority partner in L Capital. We, of course, support some of these investors, the General Family Fund and others, that we can, that can grow. These are standard private equity fund operations. Regarding the American market, as you know, we find that this is a dynamic market right now. The market has been picking up. We do not know whether this will be a sustained trend throughout 2012. We don't know about this. Needless to say, in the U.S., there is, of course, a presidential campaign going. Usually, that's not when the most drastic fiscal measures are taken as a rule. We have reason to believe that the market will be buoyant in 2012 as well. In fact, January has been excellent in January. Right. If there are no further questions, thank you for your attention.