Loewe 2024 profit down 24% as Asia slows; US and Japan drive growth
Bottom Line Impact
Absent swift cost and mix actions, Loewe's margin compression will dilute LVMH's fashion profitability; rebalancing to the US, Japan, and EMEA with a disciplined creative and digital plan can restore margin trajectory and protect brand equity within 2-3 quarters.
Key Facts
5- FY2024 revenue €885.26m, up 9.17% vs 2023 (€810.88m), vs >30% growth in 2023
- Operating profit €196.56m, down 20.61%; net profit €157.06m, down 24.26% YoY
- Asia ex-Japan sales fell 13.81% to €192.99m; Japan grew 27.56% to €172.92m
- EMEA retail revenue up 18.68% to €246.80m; US up 31.11% to €85.01m
- Retail is 78.81% of revenue; ecommerce is 2.41% and declined 13.45%; headcount 479
Time Horizons
Key Roles Affected
Executive Summary
Loewe delivered 9.2% revenue growth to €885.3m in 2024 but saw operating profit fall 20.6% and net profit decline 24.3% amid higher operating expenses, Asian softness ex-Japan, and a creative leadership transition. For LVMH, the result introduces margin pressure in Fashion and Leather Goods, while strong momentum in the US, Japan, and EMEA offers a path to re-balance; Proenza Schouler's founders now leading Loewe must defend brand heat and restore profitability within 2-3 quarters.
Actionable Insights
Immediate Actions (Next 30-90 days)
Launch a 90-day margin recovery program targeting 200-300 bps operating margin uplift via SGandA freeze, store labor optimization, and SKU mix shift toward top 50 leather SKUs with 5-7 pp higher gross margin.
Rationale: Operating profit fell 20.6% despite top-line growth; rapid cost and mix levers can restore earnings while creative transition beds in.
Role affected:CEO
Urgency level:immediate
Rationalize 15-20% of low-velocity SKUs in Asia ex-Japan and raise AUR 3-5% on hero products in US and Japan; prioritize inventory to top 30 doors with 30% higher sell-through.
Rationale: SKU and inventory focus improves sell-through, protects brand equity, and supports margin recovery where demand is strongest.
Role affected:Chief Merchandising Officer
Urgency level:immediate
Short-term Actions (6-12 months)
Reallocate 10-15% of global media from Asia ex-Japan to US, Japan, and EMEA; orchestrate a 3-wave communications plan introducing the new creative direction with teaser, runway, and store activation milestones over 6 months.
Rationale: US and Japan grew 31% and 27.6% respectively; amplifying proven demand centers while managing the creative handover will defend revenue and brand heat.
Role affected:CMO
Urgency level:short-term
Strategic Actions
Target ecommerce mix from 2.4% to 5% in 12 months by funding a CX overhaul, rolling out WeChat mini-programs and 24S integration tests, and setting a 2.0 pp conversion uplift goal; hedge CNY and JPY exposures for the next 4 quarters.
Rationale: Ecommerce decline of 13.5% is a fixable drag; modest digital growth can add €18-25m incremental revenue at high contribution and reduce Asia volatility.
Role affected:CFO
Urgency level:strategic
Risks & Opportunities
Primary Risks
- Creative transition risk leading to demand softness and lower full-price sell-through in the next 2-3 drops
- Prolonged Asia ex-Japan weakness and FX headwinds compressing gross margin and cash conversion
- Digital underinvestment prolonging ecommerce share below 3%, ceding online demand to competitors
Primary Opportunities
- US and Japan momentum to scale leather icons and limited editions, adding €50-70m revenue in 12 months
- Dior halo effect from Anderson's move to elevate LVMH traffic and cross-sell while sharpening Loewe's differentiation
- EMEA tourism recovery and retail productivity gains to lift store EBITDA by 150-200 bps