PARIS, FRANCE - OCTOBER 02: (L-R) Peter Marino attend and Owner of LVMH Luxury Group Bernard Arnault the Christian Dior show as part of the Paris Fashion Week Womenswear Spring/Summer 2016. Held at Cour Carre du Louvre on October 2, 2015 in Paris, France. (Photo by Rindoff/Le Segretain/Getty Images for Dior)Photograph by Rindoff/Le Segretain — Getty Images for Dior
Who could object to a crackdown on graft in China? The sellers of luxury items—often given as gifts to officials—that’s who. Still, LVMH has weathered the crackdown thanks to Arnault’s global diversification. Sales of alcohol, perfume, and watches have gleamed, offsetting weakness at its fashion business, which includes Louis Vuitton. Don’t underestimate LVMH’s discipline: It boasts profit margins roughly twice those of rival Kering. So even as LVMH’s revenue has leveled off around $37 billion in the past three years, profits have climbed 50%, from $4.5 billion to $6.8 billion.