Ladies and gentlemen, welcome to the MV MH 2019 First Quarter Revenue Conference Call. I will now hand over to Mr. Philippe, sir. Please go ahead.
Thank you. Hello, I'm Petrolis, Director of Financial Communications at LVMH. With me is Jean Jacques Guinee, our Chief Financial Officer. Thank you for joining us. Here are some remarks to make about LVMH's revenue for the Q1 of 2019.
As in previous periods, these revenue figures reported in accordance with the IFRS. And after these remarks, Jean Jacques and I will be happy to answer your questions. But 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. For these, I refer you to the Safe Harbor statement included in our press release and on Slide 2 of our presentation, which is on the website. Turning now to our announcement.
Hopefully, you've all had the chance to read our release, which was issued yesterday in both French and English. And as always, the release is available on the website at www.lvmh.com as well as slides that we are using to guide today's call. Turning to Slide 3 of that presentation, performance in the Q1 reflected a strong start to 2019 as we continued to deliver double digit organic growth. All business groups and regions contributed to our organic growth which was further boosted by a positive currency effect. We saw strong momentum across the board with Wines and Spirits delivering good performance, continued very positive trends at Louis Vuitton and Christian Dior Couture and steady growth within our Personalizing Cosmetics brands driven by the Caffeine Asia.
Within our Watches and Jewelry segments, Bulgari saw solid progress and positive performance continued in selective retraining at both Sephora and DFS. I also want to touch on the Belmond acquisition, which we announced in December. We are pleased that its shareholders approved the transaction in February and we are on track to close before the end of June. Turning to the overall numbers for the Q1, which is Slide 4, total revenue rose 16% on a reported basis to €12,500,000,000 from €10,900,000,000 in the year ago period. This reflects an 11% rise in organic revenue along with a 5% positive currency effect.
Our revenue mix continues to be well balanced across geographies. As you can see on the chart, Asia excluding Japan was the largest region in the Q1 representing 35% of revenue as measured in euros. This is followed by Europe, including France at 25% and the U. S. Including Hawaii at 22%, France specifically contributed 8% of revenue and Japan was at 7%.
Other markets contributed 11% of revenue. Compared to last year, Asia gained 2 points from Europe in part due to currencies but also due to its higher growth as we'll see on the next Slide 6. In terms of revenue change by region compared to last year's Q1, organic revenue rose double digits in Asia, excluding Japan at 17% And in all other regions, it grew at high single digits. Japan at 9%, the U. S.
Excluding Hawaii at 8% and Europe at 7%, all on an organic basis. Looking now at revenue by business group, I'll start with the Wines and Spirits. Organic revenue was up 9% for the quarter and after a positive currency effect, reported revenue was up 13% to €1,300,000,000 By category champagne and wines, organic revenue increased 6% and after including a positive 2% currency impact reached €458,000,000 in the Q1 of this year, up 8% compared to the year ago period. For cognac and spirits, organic revenue grew an impressive 11% and adding the positive 5% currency effect reached €891,000,000 up 15% from the year ago Q1. To give you some more color on our champagne and wines, we saw good revenue growth in all regions, driven by improved pricemix, which reflects value creation strategy.
While champagne volumes were stable, our prestige cuvettes outperformed. The S8 and wine performance was driven by a positive price effect. Turning to Cognac and Spirits, Hennessy volumes were up 11%, due primarily to strong sales of Versus and VSOP. This activity saw continued strong demand and some restocking in the U. S.
In China, the momentum continued with customers favoring larger formats of ZSFP during Chinese New Year. Finally both Exemarangi and Aberg made progress notably in the U. S. And Asian markets in the quarter. As I say, most years, this is a relatively small quarter for this business group and therefore not a representative quarter from which to extrapolate trends.
Looking now at Fashion and Leather Goods, this business group was up a strong 15% on an organic basis. On a reported basis, including a 5% positive currency effect, revenue was up 20%, reaching €5,100,000,000 from €4,300,000,000 in last year's Q1. To give you some highlights, now on Slide 10 of the quarter in this business group. Overall, we delivered strong growth in the key markets of Asia and the U. S.
Supported by solid growth in Europe, in fact double digits in all these regions. Looking in more detail at the brands, Louis Vuitton continued its remarkable momentum building on the success of its iconic lines and the introduction of new products. In addition, the brand reopened new stores after major renovations in Florence, London, Monaco and Shanghai's IFC Mall. And a new workshop opened this year, that's 16th in France, to support the increased demand. Christian Dior Couture enjoyed exceptional performance in all regions across product categories.
The brand's men's and women's runway shows were also very well received and a new exhibit about the Stuart Maison is now on view at the London's prestigious Victoria and Albert Museum. Sendi hosted its last runway show designed by Karl Lagerfeld in Milan and Celine's first ready to wear collection designed by Harry Solman arrived in stores in March. Celine also successfully launched a new store concept in Paris and New York. Laura Piena's Acuna collection and shoes showed good performance, while OABY showcased its first men's runway show by Jonathan Anderson in Paris and saw great success with its limited edition Dumbo inspired collection. And finally, Rimowa inaugurated its 1st flagship store in Japan's Ginzan district and rolled out a new collaboration with artist Alex Israel.
Fertigism and Cosmetics Business Group, revenue was up 9% on an organic basis. On a reported basis, revenue reached €1,700,000,000 up 11% sorry, 12%, including a 3% positive currency impact effect from the €1,500,000,000 in the year ago period. Across the board in this group, we saw growth of iconic brands with solid momentum in Asia. Consistent with this, Paris Saint Dior saw strong popularity of its iconic lines as well as its newly launched Joy perfume. Its makeup and skin care performed particularly well driven by Rouge Jor and Dior Skin.
Guerlain also contributed to positive performance in the Q1 through the launch of Mont Gala Blondeau Perfume and Le Sanciere de Foundation. In addition, the brand saw continued momentum of its Abay Royale skincare and rouge lipstick. Fashion Parfums Givenchy's Vanjardie performed well as the brand continued to see progress in its makeup lines, including with La Rouge and Prism Vibre. Kenzo launched flower by Kenzo De Vee, while Acqua Di Parma introduced a new collection under the name Fabier. Finally, Thank You Beauty by Rihanna continued to successfully rollout internationally, building on the vast performance the brand has experienced to date.
Now looking at our Watches and Jewelry business, Slide 13. Organic revenue was up 4% in the period, including a positive 5% currency effect. Reported revenue for the group was up 9% or over €1,000,000,000 compared to €959,000,000 in the Q1 last year. This business group had good momentum in jewelry as well as at Tubular and Dennis on the watch side. Starting with jewelry, Bulgari demonstrated strong progress driven by its recently launched Fear Ever line as well as the continued popularity of its emblematic C.
Penney and Eva Dreams lines. This year, the brand also started the celebrations Chaumet introduced a new collection called Lien Evidence and it opened a temporary boutique on the Boulevard Saint Germain during the restoration of its historic Place Vendome boutique. With respect to the watch brands, we once again had a successful part station in Baselworld this year, which we introduced a number of new models. Bvlgari launched the Serpenti Sidoti watch and the Octre Finissimo watches, Chronograph GMT Automatic and Ceramics. Both of these latter watches set world records for their thinness.
Hublot introduced a new Classic Fusion Ferrari GT, which connects watchmaking, motorization and automated design, whilst its robust growth was driven by the spirit of Big Bang and its retail stores. TAG launched a golf edition of its connected watch that features an app developed specifically for golfers. And finally, Zenith showcased its new Define Inventor and Defy Premero 21 Carbon Watches. Protective Retail Group reported an 8% rise in organic revenue. When we add the 5% positive currency effect, this brings us to a 13% on a reported basis.
Sales for the quarter rose to $3,500,000,000 from $3,100,000,000 in the year ago period. To give you some detail behind these numbers, Sephora saw further market share gains and drove exceptional comparable store revenue growth in Asia. The brand also continued its rapid growth of online sales worldwide and opened a store location in New York's newest development area called Hudson Yards. On the DFS front, we saw strong momentum in Hong Kong and Macau as well as our tea from Daco de Tezescu Galleria in Venice. In this business, Fuji outperformed other product categories in the quarter.
DSS also hosted the 8th annual edition of the Masters of Wines and Spirits in Singapore in partnership with Changi Airport Group. And the newest Canaria location is under construction as we speak at La Samaritaine in Paris, which is slated to open in 2020. Overall, our brands had a strong start to the year with all business groups and regions contributing to organic growth in the quarter. As we move forward, we continue to focus on creating innovative high quality products while selectively expanding our store network and managing costs. Against a persistent uncertain backdrop, the group will maintain a cautious outlook for the rest of the year while we continue to pursue our mission to reinforce our position as the world leader in luxury goods.
Thank you. And with that, we'll now take any questions that you might have. So, Teal, please do you have the line?
We have one first question from Mr. Edouard Rodin from Morgan Stanley. Sir, please go ahead.
Yes. Good afternoon, Jean Jacques and Chris. I guess two questions for me. The first one on Vuitton. If you could please come back on what were the main drivers behind Vuitton's better than expected top line over the past 6 months?
And I guess, distribution communication product that obviously they all played at pretty top. But in your opinion, what were the 2 or 3 main drivers, if you could please try to narrow it down for us? And my second question relates to Sephora. As you predicted earlier in the year, the top line reaccelerated in the Q1 after the weak end of the year. Is it mostly a function of higher couponing promotional activity in the U.
S? And if so, is there, so to speak, a higher pay to play in the U. S. Given the now structurally more competitive U. S.-based market?
Thank you, Edouard. On the first question, which is not the easiest to answer, The main drivers, you mentioned it, it's obviously a combination of marketing, product and distribution strategies. It's also a function of the strengths in demand. And we have to say that demand particularly in China, but not only in China, I mean demand has been very strong throughout the world. We've seen double digit numbers with Japanese, which is, as you know, is something that we haven't seen for a while.
With the American, I would say, small business as usual because we've been growing double digits with American for a long time. But still, we have very strong numbers with Americans. And finally, with the Chinese, the business is really moving from strength to strength. So I would say that the strength in the demand combined with strategies from a product and a distribution viewpoint that makes sense for most of this current base explain the success of Vuitton and what you call a surprising good trend, which we call the result of our effort. But anyway, at the end of the day, we enjoy a good ride with Vuitton.
There's no doubt about that. As far as Sephora is concerned, yes, the Q1 numbers were better significantly better than Q4. Q1 is traditionally less promotional period than Q4 or Q2. So the answer is definitely no. The level of promotional activity was not any higher than it was in the preceding year, which is then in-depth with a little bit of a better market, I would say.
Okay. Thank you.
Thank you, sir. We have another question from Mr. Anton Bel from HSBC. Sir, please go ahead.
Hi, good afternoon. It's Alphand Del Duchenne, HSBC. Three questions. First of all, there's been a very strong growth in Asia. So which would point to further repatriation of growth from Chinese consumption to more locals.
So will it be possible to have the overall share of the Louis Vuitton business done with Chinese? And maybe what was the split in Q1 2019, local versus tourists? And maybe is there a margin implication due to that trend? The second question relates to the U. S.
Where I think in cognac you've mentioned a restructuring impact. So could you comment a little bit about that, about the level of inventories? And also, I think you Chris mentioned that we shouldn't expect this trend to be sustainable. So maybe a further comment on that. And finally, within the perfume and cosmetic business, I think you mentioned another reason why since Vior outperformed, so the overall division was probably dry by 1 or 2 brands.
Would it be possible for you to mention the names of this 1 or 2 brands which are driving down the overall performance? Thank you.
Thank you, Antoine, for your three questions. Well, the first one is fairly precise, and we don't get usually into that type of detail. You mentioned nevertheless, repatriation of business onto domestic China, which is true, but it's mainly done at the expense of markets surrounding China and not European markets. If we look at what happened in Q1, the European markets, particularly with Chinese, were pretty strong and in same type of growth as we had seen before. Where we've seen some slowing down is in some markets like Macau and Hong Kong, not so much in Korea, although the domestic product in Korea offset a slowdown in the touristic part of Korea.
But at the end of the day, the non China Asia was slowing down, whereas obviously China was picking up. So we had really stability of growth in Europe, increasing growth in China and slowdown outside China and the rest of Asia. These are the trends for most of the luxury brands and particularly Vuitton, so for most of the fashion vendors, sorry, and particularly for Vuitton. But to break down, I mean, the share of Chinese customers has not changed in a tremendous way over the past few years. And the share of tourists versus locals has not changed either very much.
I mean even the difference in growth rate doesn't cause this breakdown to shift quickly and immediately. So nothing really to report there. The second question on cognac. So yes, there was a restructuring in cognac. We took the decision given the strength of the supply at the end of last year with a good harvest in 2018.
We had enough we have booked enough for the VV so that we could release some volumes. And as you know, we ended the year in 2017 2018 with a very, very low level stocks in particularly in the U. S. With distributors, we were around 20 days, and we took the decision to increase this level of inventories so that those distributors could work in a much better environment when they operate at 20 days. I mean, their life is quite complicated.
So we have put some gasoline, I would say, in the engine, and inventories now are a little bit in excess of 40 days. So it's way below normal anyway, but it's better level. So consequently, sell in is higher than sell out. It is particularly the case this quarter in the U. S.
As the sellout last year in March was particularly strong as we implemented price increases early April last year. So traditionally, when there is a price increase, the additions 4 weeks ahead of the price increase are extremely high, which is not the case this year as the price increase will take place only in June. So by comparison, we have a very high sellout month last year and a normal sellout month this year. But all in all, higher sell in than sell out, nothing to worry about, neither the sell in nor the sell out are worrying, but the normal management of a very important market for us. And thirdly, your question on perfume and cosmetic and the name of the winners, you know how much we like to bring out winners and losers if there is such a word within our portfolios.
So I will not get into details. The only hint I will give you is that the big chunk of the growth in perfume and cosmetic comes from Asia and from China, in particular, and Travel Retail as well. And you know that the traditional brands are the ones like Dior, Guillermo and Givenchy are much stronger in Asia and in travel retail than the our U. S.-based brands. So it's really these traditional brands leading the growth.
Okay. Just maybe a follow-up on the repatriation of growth in China. Any margin implication we should be aware of?
No. I told many times that particularly at Vuitton, margins are very comparable from one market to another. So whether the business takes place one place or another doesn't make any difference at the end of the day for us.
Thank you very much.
Thank you, sir. So we have another question from Mr. Lucas Ochter from Bernstein.
Yes, good afternoon. I was wondering about the pipeline of eaux de vie for what concerns cognac. Are we correct to understand that the inventory concerns that we had a while ago are now resolved, so that could be further problems down the road. Then on Seguin, I wonder if you have any update on how the market reflection of the new Celine approach to fashion and Felicelmann is going. We're getting mixed reviews on our from our contacts.
And last but not least, you were referring to Baselworld. And there was a lot of discussion this year in Basel on how and if this exhibition will continue in the future. Are you continuing to commit to other world? Or are you anticipating new ways of presenting your watch collections in the future? And if I may add a little one, if you could comment a little on the Belmont strategy and value creation approach you have in mind.
Thank you very much.
Thank you, Luca. So starting with the delivery in cognac, The answer the real answer to your question is no. We have not fully lifted our constraints in terms of eaux de vie supply. You remember that the harvest in 'sixteen and 'seventeen were extremely bad, which caused the supply of the V to curve down significantly in the particularly in the second half of last year. Obviously, with a good harvest in 'eighteen, it gives us a little bit of headroom.
And what we have done in the Q1 of the year was more market monitoring and supply management rather than proof that the pressure from supply is alleviating to an extent that we can shoot for much higher growth rate. So I'm not saying we'll be having low single digit numbers, but don't expect more than mid single digit for this business. As you know, it's very difficult to grow such an inventory intensive business more than 5%. That's probably the maximum we can expect. It was under severe pressure last year.
Pressure is less bad than it used to be. That's 5% is certainly the maximum that we can do this year and next year. So the 1st part of the year was extremely positive for various reasons, including what I described in the U. S, but also the fact that Chinese New Year took place at a different date than it did last year. So it was a different phasing of business altogether.
But at the end of the day, as Chris said, don't expect these recurrent trends to extrapolate them into rest of the year. The question on selling, I will not basically, I will not answer. As you know, we are, at the time, as we speak, putting in place the spring summer collection in the stores, so it would be very unfair to comment at the time when it's just the beginning of it. You mentioned that you got mixed reports or reviews. Actually, we don't.
We had a very, very good runaway show in late Feb, early March. And we got nothing in terms of mixed review for that. All the reviews were extremely positive. So we remain extremely optimistic as far as selling is concerned, but it's only too early to comment. As far as the backward world is concerned, I have nothing to announce.
I mean, we are not the biggest player in this universe. You have seen the action taken by the others, not only this year, but over the last few years, which are obviously a reason for us to think about it, but we have not taken any decision and have nothing to announce. As far as Belmont strategy is concerned, what I can say about this is we'll be focusing on internal growth. We feel that in accordance with management that many properties in development portfolio can develop further their profitability potential, and we will concentrate on that. And we expect to generate significant EBIT and EBITDA growth in the next few years just by focusing on optimization of existing properties.
So we don't rule out acquiring properties here and there, but not in a significant way. I mean, focus will definitely be on existing ones.
Fantastic. Thank you, Jean Jacques.
Thank you, sir. We have another question from Mr. David Damayev of C&C.
The first on Fashion and Leather. I know you don't disclose performance by brands. Maybe you can give us more indications on which are the brands that are currently outperforming the most amongst your biggest brands? I mean, do you want to highlight particularly strong performance from one of your star brands during the quarter or the growth has been well balanced between them? And the second question on Vuitton.
So the creative momentum is clearly impressive. You mentioned strong growth in all businesses, but have you more recently recorded an acceleration in growth in some specific product categories, for example, garment wear or even shoes? Thank you.
Thank you, David. We don't like so much to comment on the relative performance of brands. The whole portfolio did very well, as you see from the global numbers. Some brands like Essent Dior and Vuitton did particularly well. I would say, doesn't mean that the others are doing badly.
I mean, overall, we are extremely satisfied with the global performance of the portfolio. And I don't intend, as I said before, to give good marks and bad marks to some of the brands. That's not what we do in this call. As far as LV is concerned, most of the categories, not most, all the categories did very well, some did better than the noses. Just to mention ready to wear, both men ready to wear and women ready to wear had an outstanding Q1.
This is not isolated. Last year, this business was already very good, but it is consequently good this year. It's not a major business altogether for us at Vuitton, but it's worth pointing out as this is obviously a traffic generator for many stores. And we are very happy to say that this business is doing particularly well.
We have another question from Madam Achal Verha from Avior. Madam, go ahead.
Hi. Thank you for taking my questions. I've got 3 questions. The first one is on the Watches and Jewellery division. Can you maybe comment on the growth of watches versus jewelry?
And then the second question is linked to watches. Can you maybe just elaborate a little bit on performance of owned stores versus that of 3rd party retailers? And then the third question is on growth by nationality. Can you maybe give us an indication of like the nationality trends there, so Chinese, U. S, European and Japanese?
Thank you.
Okay. I'll start with the last question, which we basically cannot answer because we are a wholesale business. And therefore, it's hard for us to monitor who our clients are selling to. So by nationality, it's very difficult to do. The only thing I would say is that our business is doing better in the eastern part of the world than in the western part of the world.
So it probably tells something about which countries are doing better than others. But the monitoring of nationalities in the same way as we do it in retail business is impossible in this business. So as far as your first question is concerned, watches versus jewelry, like preceding waters, the jewelry business is doing better than watches. Watches has been under pressure for some time. We are repositioning entire year.
We commented that many times already. This comes with growth staying under pressure as per the year as it's been the case in preceding quarters and what jewelry are doing much better, particularly Bulgari where we were where we registered the low double digit growth, which is worth pointing out in the current environment. As far as own stores in watches are concerned, they are doing better than the wholesale business. To be frank, I'm not so sure that our statistics are that significant. We don't have that many own stores within our own distribution within the global watches business.
It's about 15% of total. But for what it's worth, this business is even better than the wholesale business.
Okay. Maybe just a follow-up on that. So in terms of the different categories, so fashion and leather versus your watches, why is there the significant underperformance at your watch, generally in watch brands versus I just want your opinion on
that. Well, it's very difficult to say. I think it's by and large demand driven. And we've seen demand being strong in fashion and leather in all geographies for quite some time. It's been the case in Japan.
It's been the case in Europe. It's been the case in the U. S. And obviously in Asia, including China. As far as watches are concerned, the main driver of the growth and I take it sort of 10 years view has been China.
And China had some slowdown, significant slowdown as the rest of the categories in 2014 from 2014 onwards, which has not recovered in the same way as the other categories since then. So it's I think it's mainly demand driven with a high concentration of growth onto the Chinese customers that have proven less that have rebounded less than the than it's in the case in other categories.
Thank you
very much.
Thank you, madam. So we have another question from Mr. Olivier Chen from Cowen and Company.
Hi, thank you. Regarding Sephora, where do you see e commerce profitability and penetration going over time. And we had a question on Bhutan and e commerce and digital. What are your thoughts about inventory management between the online and the physical store channel and where that is? And how you're thinking about integrating Mobile Plus stores and relationships with platforms such as Farfetch and others?
Thank you.
Thank you. I feel a bit embarrassed about your first question. What I can say is that going forward, we've kept both penetration and profitability of digital and online at Sephora to go up that you would have been surprised if I said the opposite. Profitability for the time being within digital altogether is higher slightly higher than it is with brick and mortar, and we expect this profitability going forward to remain higher. And the growth rates we have in digital is also higher than the growth rate in brick and mortar.
So logically, we expect both penetration and profitability to go up in the future. Your second question is, I would say, very important and very relevant question. Unfortunately, it's hard for me to answer because it's something we are currently reviewing and discussing internally. It's a very important topic, what do we do with our inventories and we make this available to platforms. But no decision has been taken yet, at least for our largest brand.
So I really cannot answer on this. The only thing I can say is it's a relevant question, and we'll have to come to some views on this in the quite near future.
Okay. On the Sephora, thank you. Has the U. S. Experienced negative physical store traffic offset by conversion rates?
Has that also been true for your U. S. Sephora business? And I would love to talk some category strength. We've seen skincare improve where cosmetics have faced tough comparisons.
How are you thinking about the portfolio in the context of managing the categories within Sephora U. S?
That's a good point, Wael.
Traffic is still in very low growth or slightly negative and conversion rate is going up, which is usually what happens. I mean, we have probably more relevant customers in our stores and therefore, we have less traffic and higher conversion rate. At the end of the day, I mean, this really the 2 going together, it doesn't mean that we cannot grow the business. The business is just done slightly differently. As far as categories is concerned, the makeup category is a little bit under pressure in the U.
S. It's been the case for the last 12 months, I would say. And the skincare business, which is really growing fast and gaining in importance at Cetora, not only from the share of total business, but also from a shelf space viewpoint, I would say. So I feel that in the coming months years, the Singular business will be a very important component of Sephora's growth in the U. S.
And probably elsewhere as well.
And just last question on Sephora. One question and one observation is that you've done a very good job across core mass and sizes from having versatility and flexibility and how you think about physical retail within the Sephora banner, the competitive Hudson Yard. What are your thoughts about store format and the right size and how you're approaching square footage growth in terms of doing that in an experiential manner for the new customer and also as we see different kinds of real estate emerge within retailing in the U. S?
Well, that's a very good point. The only way to answer your question is what we do basically is to test and learn. We are opening different formats in the particularly in the U. S, smaller formats, different opening hours, and we see what happens. I mean, there is no such thing as a theory as to what is the right format of a Sephora store in the U.
S. It's only experience that will tell us what we should be doing. To the credit of the team, we are experiencing new formats, testing and trying to learn what could be the winning formulas and deploy them on the largest scale in the future. It's what we've always done with Sephora, particularly in the U. S.
Is not one single format. It's several formats, including the and the brick and mortar. And within brick and mortar, we have different expression of the brand, and we will continue to do so. It's way too early to tell you what kind of format may emerge in the future, but CNY is constantly on the test and learn exercise.
Thank you. Best regards.
Thank you.
Thank you, sir. We have another question from Mr. Rogerio Puigimovy from RBC Markets.
Can you ask a question about regional growth for Fashion and Leather? How do the regional growth for Fashion and Leather Company to group growth mentioned in Slide 6? And second, if you could relate to the total total Chinese cost of growth in Q1. And the drivers of the strong growth of Zito in Q1, Any change in terms of contribution from volume versus ASP change? Thank you.
Thank you, Rogerio. Well, the Fashion Lada versus group on a regional basis, roughly thinking, Fashion and Leather, which as you've seen from the group's numbers, is growth is higher than the global group's growth. It's exactly the same in all regions. So we have fashion leather being significantly above in Europe, more or less in line, little bit above in Japan, significantly above in the U. S.
And as well a little bit above in Asia. So that's the main trend. As far as volume versus price and mix as we turn, as in the preceding quarter, the bulk of the growth comes from volumes. Volumes are up double digit. At return, there is a little bit of price, but nothing really significant as we have not passed any price increase this year.
So a little bit of lagging impact from last year's price increase, but not really significant. And as always, a little bit of mix impact, but really the volume comes from volumes. And sorry, there was another question. So the Chinese customer for Vuitton in Q1 was up a little bit more or less in line with what we've seen in preceding quarters. So the same type of growth as we have seen presently.
Thank you.
Thank you, sir. We have another question from Ms. Dana Telsey from TD Group.
Good morning and good afternoon and congratulations on the progress. You talked a little bit about tourist trends. Any more color in terms of what you're seeing by region, where people are traveling to and from and what you're seeing? And then on the remodeled stores that you've done for Louis Vuitton, what have you seen that's been impactful that is put in other stores maybe of the experiential nature?
Thank you. Well, the Zorentic trend, not much to be added to what I said before. We've seen obviously, the traffic is extremely high throughout Asia. But when it comes particularly to the most expensive items due to the fact that price gap in between Asia and China have narrowed significantly. We see less growth and less business being done outside China.
As far as Europe is concerned, as I said, globally, the business is pretty good with tourists. We see a little bit of pressure in France with the unrest on Saturdays, which is a little bit taking its toll, although we are still positive in France for all the brands. And I think conversely, we see a very good activity in the U. K. So the U.
K. In Q1 has been stronger than we thought. It's probably a little bit at the expense of France. Altogether, Europe is extremely satisfactory, and we still keep a high level of touristic flows in Europe. As far as the remodeling of LV Tours is concerned, obviously, we implement good ideas from one store to another.
The only point I would make, it's very difficult to be specific on your questions because there are plenty of examples of small magnitude that could be described, but I don't think that would be very significant to comment on this call. The only thing I would say is that the main retail initiative, as we do and in some other brands in pop up stores. I mean, that's something that we have developed over the last couple of years. We shall do about 100 pop up stores in 2019 after 80 last year. And this is the privileged way and the main way to drive innovation and newness from a pure retail viewpoint into in front of the customer.
So this trend or pop up stores is extremely important. And we will continue in developing that because it enables us to be working in a different way to our clients in different places. And that's very important and it adds flexibility to a retail network, which by definition is a bit rigid and enables us to be in different place at different times.
Thank you.
Thank you, madame. Next question is from Ms. Louise Singerhurst from Goldman Sachs.
Two questions really on VACRAT LV for me, please. That'd be quick. Just in terms of can you help us think about how you consider really the pace of growth? Because obviously, we're seeing some really large growth numbers on a very large brand. So if you could give that of Fashion and Leather, but particularly for the brand in terms of the budget process, but also managing the manufacturing process because Intimid is internalized.
If you could help us just think about that balance on growth equation, that would be really helpful. And then secondly, a small one. Is there anything particularly to call out by product category? Obviously, men's were quite small, but doing phenomenally well with Virgil Abloh. And online, if you can give us any context if it's particularly important in terms of the underlying, you know, percentage of sales now?
I know it's small, but it's obviously growing quite well.
Thank you, Louise. Well, your question on the supply chain of fast growing brands like L'Ank LV is obviously a very important question for us. As you know, we have a very high level of vertical integration. So that creates some form of constraints in terms of meeting a very high demand. The flexibility of engine production is not the same as the production that is subcontracted.
Nevertheless, to the credit of Vuitton and it didn't start yesterday, I mean, they've been working on that for quite a number of years. And the production and supply chain people of Vuitton have done a fantastic job in enabling us to develop the production and the number of items they put into the stores in a tremendous way. First with the same level of Atelier and after that by opening up new Atelier. So they've done a very good job and they've created flexibility and that enables us to grow at double digit levels in volume terms and it's been going on for a while, which probably 10 years ago wouldn't have been thinkable. That's I think we've done a very good job there.
And we will carry on monitoring the production capabilities, adding up new Atelier in France when we think it makes sense and where we think it makes sense. The second question on product category, you mentioned ready to wear in men and women. As you said, I mean, it's not the biggest business of all at Vuitton, but we had equivalent growth rates at a very, very high level. I mean, we are very satisfied with both the women and the men business. They are of similar sizes altogether.
The growth rate is more or less the same at very high level. So it's very satisfactory. As far as online is concerned, the online business is growing fast. Obviously, we only provide details on a group wide basis, not on a brand by brand basis. And as you know, online at Vuitton is purely Vuitton.
No further questions, sir.
Okay. So thank you very much. I have no further remarks
to make. I just before attending this call, and I look forward to discussing with you first half figures toward the end of the Q1. Thank you, and good afternoon.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.