Ladies and gentlemen, welcome to the LVMH 2019 first quarter revenue conference call. I will now hand over to Mr. Chris. Mr., please go ahead.
Thank you. Hello, I'm Chris Hollis, Director of Financial Communications at LVMH. With me, Jean-Jacques Guiony, our Chief Financial Officer. Thank you for joining us. We have some remarks to make about LVMH's revenue for the first quarter of 2019. As in previous periods, these revenue figures are reported in accordance with the IFRS. After these remarks, Jean-Jacques and I will be happy 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. For these, I refer you to the safe harbor statement included in our press release and on slide two 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. As always, the release is available on the website at www.lvmh.com, as are the slides that we are using to guide today's call. Turning to slide three of that presentation. Performance in the first quarter 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 perfumes and cosmetics brands, driven by [inaudible]. Within our watches and jewelry segment, Bulgari saw solid progress, and positive performance continued in selective retailing 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 first quarter, this is slide four. Total revenue rose 16% on a reported basis to EUR 12.5 billion from EUR 10.9 billion 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 first quarter, 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 two points from Europe, in part due to currencies, but also due to its higher growth, as we will see on the next slide six. In terms of revenue change by region compared to last year's first quarter, organic revenue rose double digits in Asia, excluding Japan, at 17%. 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 you 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 EUR 1.3 billion.
By category, champagne and wines, organic revenue increased 6%, and after including a positive 2% currency impact, reached EUR 458 million in the first quarter 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 EUR 891 million, up 15% from the year ago first quarter. To give you some more color on our champagne and wines, we saw good revenue growth in all regions driven by improved price mix, which reflects their value creation strategy. While champagne volumes were stable, our prestige Cuvées outperformed. Estates and wines performance was driven by a positive price effect. Turning to cognac and spirits, Hennessy volumes were up 11%, due primarily to strong sales of V.S and V.S.O.P. This activity saw continued strong demand and some restocking in the U.S.
In China, the momentum continued, with customers favoring larger formats of V.S.O.P during Chinese New Year. Finally, both Glenmorangie and Ardbeg 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 & 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 EUR 5.1 billion from EUR 4.3 billion in last year's first quarter. 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. A new workshop opened this year. That's the 16th in France to support the increased demand. Christian Dior Couture enjoyed exceptional performance in all regions and across product categories. The brand's men's and women's runway shows were also very well-received, and a new exhibit about the storied Maison is now on view at the London's prestigious Victoria and Albert Museum. Fendi hosted its last runway show designed by Karl Lagerfeld in Milan, and Celine's first ready-to-wear collection designed by Hedi Slimane arrived in stores in March. Celine also successfully launched a new store concept in Paris and New York.
Loro Piana's Acapulco collection and shoes showed good performance, while Loewe showcased its first men's runway show by Jonathan Anderson in Paris and saw great success with its limited edition Dumbo-inspired collection. Finally, Rimowa inaugurated its first flagship store in Japan's Ginza district and rolled out a new collaboration with artist Alex Israel. Perfumes and Cosmetics business group revenue was up 9% on an organic basis. On a reported basis, revenue reached EUR 1.7 billion up 12%, including a 3% positive currency impact, effect from the EUR 1.5 billion 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, Parfums Christian Dior saw strong popularity of its iconic lines, as well as its newly launched Joy by Dior perfume. Its makeup and skincare performed particularly well, driven by Rouge Dior and Diorskin.
Guerlain also contributed to positive performance in the first quarter through the launch of Mon Guerlain Bloom of Rose perfume and L'Essentiel foundation. In addition, the brand saw continued momentum of its Abeille Royale skincare and Rouge G lipstick. Parfums Givenchy's L’Interdit performed well as the brand continued to see progress in its makeup lines, including with Le Rouge and Prisme Libre. Kenzo launched Flower by Kenzo eau de vie , while Acqua di Parma introduced a new collection under the name Barbiere. Finally, Fenty Beauty by Rihanna continued to successfully roll out internationally, building on the robust performance the brand has experienced to date. 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% to over EUR 1 billion, compared to EUR 959 million in the first quarter last year.
This business group had good momentum in jewelry, as well as at Hublot and Zenith on the watch side. Starting with jewelry, Bulgari demonstrated strong progress, driven by its recently launched Fiorever line, as well as the continued popularity of its emblematic Serpenti and Divas' Dream lines. This year, the brand also started the celebrations of the 20th anniversary of the B.zero1 ring. This all helped with the performance of its own stores during the period. Chaumet introduced a new collection called Liens Évidence, and it opened a temporary boutique on the Boulevard Saint-Germain during the restoration of its historic Place Vendôme boutique. With respect to the watch brands, we once again had a successful participation in Baselworld this year, at which we introduced a number of new models. Bulgari launched the Serpenti Seduttori watch and the Octo Finissimo watches, a 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 automotive 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. Finally, Zenith showcased its new DEFY Inventor and DEFY El Primero 21 carbon watches. Selective 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 EUR 3.5 billion from EUR 3.1 billion 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 the Hudson Yards. On the DFS front, we saw strong momentum in Hong Kong and Macau, as well as our T Fondaco dei Tedeschi Galleria in Venice. In this business, beauty outperformed other product categories in the quarter. DFS also hosted the eighth annual edition of the Masters of Wines and Spirits in Singapore, in partnership with Changi Airport Group. The newest Galleria 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 persisting 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. With that, we'll now take any questions that you might have. Teal, please read me the line.
Yes, ladies and gentlemen, if you wish to ask a question, you may press zero one on your telephone keypad. We have one first question from Mr. Edouard Aubin from Morgan Stanley. Sir, please go ahead.
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 six months. I guess, distribution, communication, product, obviously they all played a part, but in your opinion, what were the two or three main drivers, if you could please try to narrow it down for us. My second question relates to Sephora. As you predicted earlier in the year, the top line re-accelerated in the first quarter after the weak end of the year. Is it mostly a function of higher couponing promotional activity in the U.S.? If so, is there, so to speak, a higher play to play in the U.S. even in the now structurally more competitive U.S. cosmetic market?
The first question, which is not the easiest to answer. The main drivers, you mentioned it's obviously a combination of marketing products and distribution strategies. It's also a function of the strengths in demand. We have to say that demand, particularly in China, but not only in China, demand has been very strong throughout the world. We've seen double-digit numbers with Japanese, which as you know, is something that we hadn't seen for a while. With the American, I would say it's more business as usual because we've been growing double digits with American for a long time. Still, we have very strong numbers with Americans, and finally, with the Chinese, the business is really moving from strength to strength.
I would say that the strengths in the demand, combined with strategies from a product and a distribution viewpoint that makes sense for most of this client base, explain the success of Vuitton and what you call a surprising good trend, which we call the result of our effort. 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 significantly better than Q4. Q1 is traditionally a less promotional period than Q4 or Q2. The answer is definitely no. The level of promotional activity was not any higher than it was in the preceding year, which has ended up with a little bit of a better market, I would say.
Okay. Thank you.
Thank you, sir. We have another question from Mr. Antoine Belge from HSBC. Sir, please go ahead.
Yes. Hi, good afternoon, sir. Antoine Belge, HSBC. Three questions. First of all, there's been a very strong growth in Asia, which would point to a further repatriation of growth from Chinese consumption to more local. Would 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? Second question relates to the U.S., where I think in Cognac, you've mentioned a restocking impact. I guess I'm asking 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. Maybe just other comment on that.
Finally, within the perfume and cosmetic business, I think you mentioned another reason why it seems that your outperformed. The overall division was probably dragged by one or two brands. Would it be possible for you to mention the names of this one or two brands which are dragging down the overall performance? Thank you.
Thank you Antoine for your three questions. 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 part in Korea offset a slowdown in the touristic part of Korea. At the end of the day, the non-China Asia was slowing down, whereas obviously China was picking up.
We had really stability of growth in Europe, increasing growth in China and slowdown outside China, in the rest of Asia. These are the trends for most of the luxury brands and particularly Vuitton. For most of the fashion leather, sorry, and particularly for Vuitton. To break down, 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. Even the difference in growth rate doesn't cause this breakdown to shift quickly immediately. Nothing really to report there. The second question on Cognac. Yes, there was a restocking 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 have enough eau de vie so that we could release some volumes.
As you know, we ended the year in 2017 and 2018 with a very low level of stocks, 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, their life is quite complicated. We have put some gasoline, I would say, in the engine and inventories now are a little bit in excess of 40 days. It is way below normal anyway, but it's a better level. Consequently, sell in is higher than sell out. It is particularly the case this quarter in the U.S. as the sell out last year in March was particularly strong as we implemented price increases early April last year.
Traditionally when there is a price increase, the conditions four 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. By comparison, we have a very high sell out months last year and a normal sell out months 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. That's a normal management of a very important market for us. Thirdly, your question on perfume and cosmetic and the name of the winners. You know how much we like to point out winners and losers if there is such a word within our portfolio. 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. You know that the traditional brands are the ones like Dior, Guerlain and Givenchy are much stronger in Asia and in travel retail than our U.S.-based brands. It's really these traditional brands leading the growth.
Okay. Just maybe a follow-up on the repatriation, of course, 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. 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. We have another question from Mr. Luca Solca for Bernstein. Sir.
Yes, good afternoon. I was wondering about the pipeline of eau de vie for what concerns cognac. Are we correct to understand that the inventory concerns that we had a while ago are now resolved, or there could be further problems down the road? On Celine, I wonder if you have any update on how the market reception of the new Celine approach to fashion under Hedi Slimane is going. We're getting mixed reviews from our contacts. Last, 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 Baselworld, or are you anticipating new ways of presenting your watch collections in the future?
If I may add a little one, if you could expand a little on the Belmond strategy and value creation approach you have in mind. Thank you very much.
That's a little one. Thank you, Luca. Starting with eau de vie in Cognac. The short answer to your question is no, we have not fully lifted our constraints in terms of eau de vie supply. You remember that the harvest in 2016 and 2017 were extremely bad, which caused the supply of eau de vie to curve down significantly, particularly in the second half of last year. Obviously, with a good harvest in 2018, it gives us a little bit of headroom. What we have done in the first quarter 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 rates. I'm not saying we'll be having low single-digit numbers, but don't expect more than mid-single digits 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, but 5% is certainly the maximum that we can do this year and next year. The first 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. It was a different phasing of business altogether. At the end of the day, as Chris said, don't extrapolate the current trends into the rest of the year. The question on Celine, Olivier 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 a 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 good runaway show in late February, early March, and we got nothing in terms of mixed review for that. All the reviews were extremely positive. We remain extremely optimistic as far as Celine is concerned, but it's too early to comment. As far as Baselworld is concerned, I have nothing to announce. 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.
We have not taken any decision and have nothing to announce. As far as Belmond strategy is concerned, what I can say about this is we will be focusing on internal growth. We feel that, in accordance with management, that many properties in the Belmond portfolio can develop further their profitability potential, and we will concentrate on that. We expect to generate significant EBIT and EBITDA growth in the next few years just by focusing on optimization of existing properties. We don't rule out acquiring properties here and there, but not in a significant way. Focus will simply be on existing ones.
Fantastic. Thank you, Jean-Jacques.
Thank you, sir. We have another question from Mr. David Da Maia for CMC. Sir.
Hi. Good afternoon. Thank you for taking my questions. The first one on fashion and leather. I know you don't disclose performance by brand, maybe you can give us more indications on which are the brands that are currently outperforming the most amongst your biggest brands. Do you want to highlight a particularly strong performance from one of your star brands during the quarter, or the growth has been well-balanced between them? The second question on Vuitton. 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, ready-to-wear or even shoes? Thank you.
Thank you, David. We don't like to comment on the relative performance of brands. The whole portfolio did very well, as you see from the global numbers. Some brands like Christian Dior and Vuitton did particularly well, I would say. That doesn't mean that the others are doing badly. 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 others. 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. It is particularly good this year.
It's not a major business altogether for us at Vuitton, but it's worth, of course, pointing out as this is obviously a traffic generator for many stores, and we are very happy to see that this business is doing particularly well.
Thank you.
Thank you, sir. We have another question from Madam [inaudible] from Avior. Madam, go ahead.
Hi. Thank you for taking my questions. I've got three questions. The first one is on the watches and jewelry division. Can you maybe comment on the growth of watches versus jewelry? The second question is still linked to watches. Can you maybe just elaborate a little bit on the performance of owned stores versus that of third-party retailers? The third question is on growth by nationality. Can you maybe give us an indication of the nationalities as the trends is, so Chinese, U.S., European, and Japanese? Thank you.
Okay. Thank you. Well, 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. 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. The monitoring of nationalities in the same way as we do it in retail business is impossible in this business. As far as your first question is concerned, watches versus jewelry, like preceding quarters, the jewelry business is doing better than watches. Watches has been under pressure for some time. We are repositioning TAG Heuer. We commented that many times already.
This comes with growth being under pressure as TAG Heuer, as it's been the case in preceding quarters, and jewelry are doing much better, particularly Bulgari, where we registered a low double-digit growth, which is worth pointing out in the current environment. As far as owned 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 owned stores with our own distribution within the global watches business. It's about 15% of total. For what it's worth, this business is doing better than the wholesale business.
Thank you. Maybe just to follow up on that. Basically, in terms of the different categories, so fashion and leather versus your watches, why is there the significance on the performance 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 a sort of tenured view, has been China. China had some significant slowdown as the rest of the categories from 2014 onwards, which has not recovered in the same way as the other categories since that. I think it's mainly demand-driven with a high concentration of growth onto the Chinese customers that have rebounded less than it's the case in other categories.
Thank you very much.
Thank you, madam. We have another question from Mr. Oliver Chen from Cowen and Company, sir. Please go ahead.
Hi, thank you. Regarding Sephora, where do you see e-commerce profitability and penetration going over time? We had a question on Vuitton 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 expect 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 slightly higher than it is with brick-and-mortar, and we expect this profitability going forward to remain higher. The growth rate we have in digital is also higher than the growth rate in brick-and-mortar. Logically, we expect both penetration and profitability to go up in the future. Your second question is, I would say, a 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?
Do we make this available to platforms? No decision has been taken yet, at least for our largest brand. I really cannot answer on this. The only thing I can say, 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. As the U.S. has experienced negative physical store traffic offset by conversion rates, has that also been true for your U.S. Sephora business? I would love thoughts on category strength. We've seen skincare improve, where cosmetics has 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. Well, traffic is still in very low growth or slightly negative, conversion rate is going up, which is usually what happens. We have probably more relevant customers in our stores, therefore, we have less traffic and higher conversion rate. At the end of the day, the two going together, it doesn't mean that we cannot grow the business. The business is just on 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. The skincare business, which is really growing fast and gaining importance at Sephora, not only from a share of total business, but also from a shelf space viewpoint, I would say.
I feel that in the coming months and years, the skincare business will be a very important component of Sephora's growth in the U.S. and probably elsewhere as well.
Just last question on Sephora. One question and one observation is that you've done a very good job across formats and sizes from having versatility and flexibility in how you think about physical retail within the Sephora banner, the concept of Hudson Yards. What are your thoughts about store format and the right size and how you're approaching foot in 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, and particularly in the U.S., smaller formats, different opening hours, and we see what happens. 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, they are experiencing new formats, testing, and trying to learn what could be the winning formulas and deploy them on a larger 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 JCPenney, the .com, and the brick-and-mortar.
Within brick-and-mortar, we have a 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 Sephora is constantly on the test-and-learn exercise.
Thank you. Best regards.
Thank you.
Thank you, sir. We have another question from Mr. Fujimori from RBC. [Marcus], sir.
Hi, Jean-Jacques. Hi, Chris. Can I ask a question about regional growth for Fashion and Leather? How did the regional growth for Fashion and Leather compare to the total group growth mentioned in slide six? The second, if you could relate to that, talk a little bit about the total Chinese cluster growth in Q1, and the drivers of the strong growth of Vuitton in Q1. Any change in terms of contribution from both volumes versus ASP change. Thank you.
Thank you, Rogerio. The fashion leather versus group on a regional basis, roughly speaking, fashion and leather, which as you've seen from the group's numbers, its growth is higher than the global group's growth. It's exactly the same in all regions. We have fashion leather being significantly above in Europe, more or less in line, a little bit above in Japan, significantly above in the U.S., and as well, a bit above in Asia. That's the main trend. As far as volume versus price and mix at Louis Vuitton, as in the preceding quarter, the bulk of the growth comes from volumes. Volumes are up double digits at Louis Vuitton. There is a little bit of price, but nothing really significant, as we have not passed any price increase this year.
A little bit of lagging impact from last year's price increase, but nothing really significant, and as always, a little bit of mix impact, but really the bulk comes from volumes. Sorry, there was another question.
China customer.
The Chinese customer care for Vuitton in Q1 was at double digits, more or less in line with what we've seen in preceding quarters. The same type of growth as we have seen precedently.
Thank you.
Thank you, sir. We have another question from Mrs. Dana Telsey from Telsey Advisory Group. Madam Telsey.
Good morning, and well, 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? Then on the remodeled stores that you've done for Louis Vuitton, what have you seen that's been impactful that you put in other stores that may be of the experiential nature? Thank you.
Thank you. Well, the touristic 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. I think conversely, we see a very good activity in the U.K. 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 stores 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 a 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 tour in some other brands, is pop-up stores, and that's something that we have developed over a couple of years. We shall do about 100 pop-up stores in 2019 after 80 last year.
This is the privileged way and the main way to drive innovation and newness from a pure retail viewpoint in front of the customer. This trend of pop-up stores is extremely important, and we will continue in developing that because it enables us to be talking in a different way to our clients in different places. That's very important, and it adds flexibility to a retail network, which by definition is a bit rigid, and it enables us to be in different places, different times.
Thank you.
Thank you, madam. Next question from Mrs. Louise Singlehurst from Goldman Sachs. Madam.
Hi, good afternoon. Hi, Chris. Hi, Jean-Jacques. Two questions really on the back of LV for me, please. I'll be quick. In terms of, can you help us think about how you consider really the pace of growth? Obviously we're seeing some really large growth numbers on a very large brand. If you can think about the context of fashion and leather, particularly for the brand in terms of the budget process, also managing the manufacturing process, so much is internalized. If you could help us just think about that balance and growth equation, that would be really helpful. Secondly, a small one. Is there anything particularly to call out by product category? Obviously, menswear quite small, doing phenomenally well with Virgil Abloh.
Online, if you can give us any context, if it's particularly important in terms of the underlying percentage of sales now. I know it's small, it's obviously growing quite well. Thank you.
Thank you, Louise. Well, your question on the supply chain of fast-growing brands like LV is obviously a very important question for us. As you know, we have a very high level of vertical integration, that creates some form of constraints in terms of meeting very high demand. The flexibility of internal production is not the same as the production that is subcontracted. Nevertheless, to the credit of Vuitton, it didn't start yesterday, they've been working on that for quite a number of years. 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, after that, by opening up new ateliers.
They've done a very good job, they've created flexibility, that enables us to grow at double-digit levels in volume terms. It's been going on for a while, which probably 10 years ago wouldn't have been thinkable. I think we've done a very good job there. 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. Your second question on product category, you mentioned ready-to-wear and men, women. As you said, it's not the biggest business overall at Vuitton. We had equivalent growth rate at a very, very high level. We are very satisfied with both the woman and the men business. They are of similar sizes altogether. The growth rate is more or less the same, at very high level. It's very satisfactory.
As far as online is concerned, the online business is growing fast. Obviously, we only provide details on a groupwide basis, not on a brand basis. As you know, online at Vuitton is purely vuitton.com.
Thank you very much. No further questions, sir.
Okay. Thank you very much. I have no further remarks to make. I just thank you for attending this call, and I look forward to discussing with you first half figures towards the end of July. Thank you, and good afternoon.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.