In a short span of time, the Christian Dior group achieved its main objective: to make LVMH the world leader of the luxury industry. This accomplishment was achieved despite the risks of the prevailing economic situation. Thanks to a rigorous financial management and the purchases made by some of the very famous and recognized brands of the industry, the Christian Dior group knew how to manage its growth and its brand image. The strategic development of the brands encompasses multiple aspects from the voluntarily selective distribution to the irreproachable product developments. Christian Dior remains a leader in the world of fashion for more than 50 years. It was founded in 1945 by Christian Dior and Pierre Allemand. The first objective was to create a high couture house. Christian Dior made the fashion revolution after the Second World War and imposed its style and the new vision of women. The company revived the notion of luxury after a long dismal period marked by the Second World War. We will try to analyze the financial statements of the group. In the first part, we will present the group, its history, its organization and its activities. In the second part, we will present an analysis of the luxury industry, the main actors and the most important facet of 2007 which impacted the sector. Finally, we will analyze the financial statements of the Christian Dior group.
[...] The other groups, as we will see later on, are the principal and direct competitors of the Christian Dior group. The industrial companies are not a bit diversified. They are concentrated in a limited number of market segments. One of the main actors is Clarins. These companies are smaller in size and are competitive to Christian Dior only in a specific segment (example Clarins is a competitor in the Cosmetics segment) The niche groups are also not all that diversified but optimize their portfolio management thanks to very famous brands. [...]
[...] Christian Dior made the fashion revolution after the war and imposes its style and the new vision of women. The company revived the notion of luxury after a long dismal period marked by the Second World War. The company chooses to extend its activities, first in creating perfumes and high fashion, and then established itself in the United States to grab the opportunities of a new booming market in 1948. Year after year, the company never stopped to grow, surprise and impose itself as a major actor. [...]
[...] In others words, it means that the short term solvency of Christian Dior group decreased. But the figure stays positive and demonstrates that the firm can pay its current liabilities when they are due Current Ratio This ratio, which provides us an indication of the liquidity, compares the amount of current assets to current liabilities. This figure depends also on the industry. We can see in our case that the current ratio is high and proves the existence of extra assets Acid Test / Quick Ratio The acid test gives us an indication about the liquidity position of the group. [...]
[...] The Christian Dior Group is highly concerned by the currency market fluctuations because of its exposition to the American market. But the group decided in 2007 to increase its prices 3 times and minimize the change effect without any impact on the sales. Revenue by currency These records are directly linked to the commercial strategy based on high innovation rhythms, on premium products and an important exposition in emerging countries which guarantee a high progression rate of the sales. These elements assure profitability. [...]
[...] Summarize Industry trends Challenges Brand diversification Minimize the crisis impacts Concentration of the sector Secure the uncertain market (emerging markets) Globalization of the offers Master the internet opportunity Democratization of luxury goods Fight against counterfeiting High competition Reach the critical size Internet as a new objective Differentiation Christian Dior's financial analysis The Christian Dior Group realized an excellent year in 2007 because of the level of the sales and its profitability. The amount of the sales, 17.245 billion, reflects an organic growth approaching 13%. [...]
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