>> In the wake of the 23 percent decline in first-half profits it announced Monday, LVMH plans to postpone or suspend marketing and promotions for its brands that failed to be top performers, according to CFO Jean-Jacques Guiony.
He did not specify which brands would receive the "selective investments" still being made, but its wines, spirits, watches, and jewelry businesses were hurt in the past few months and seem like contenders for those being passed over. This new withholding strategy is part of LVMH's cost containment plan for the remainder of 2009.
So which fashion brands might be affected? »
Louis Vuitton bags and luggage had a "particularly exceptional" first half of the year, so don't expect Louis Vuitton advertising to go anywhere; the same goes for Fendi, which also improved its performance in the second quarter. But some of LVMH's other fashion brands — which went unspecified, but could possibly include Loewe, Celine, Kenzo, Givenchy, Marc Jacobs, Donna Karan, or Emilio Pucci — didn't do as well in the second quarter.
With this new spartan spending approach, is it possible we may be saying adios to some of those brands' ads for the remainder of the year? Donna Karan already has such a tight budget that she's relegated to Photoshopping one model's head from a runway shot to another model's body for her Fall 2009 campaign.