Luxury brand Louis Vuitton (LHMV) may consider metaverse as a business opportunity, CEO Bernard Arnault said. He, however, also sounded a note of caution and said the company was wary of bubbles.
Stating that the metaverse could “offer a business opportunity”, LVMH CEO Bernard Arnault during the company’s earnings call on January 27, noted that they however “have to be wary of bubbles”, CNBC reported.
“For now, LVMH is focused on the real rather than the virtual. At this stage, we are very much in the real world, selling real products. We are not interested in selling virtual sneakers for 10 euros. We’re not into that,” Arnault said.
He was also cautious of speculative bubbles with limited commercial value, adding: “We have to be wary of bubbles. At the beginning of the internet, there were all sorts of things popping up and then the bubble burst. There may be relevant applications, but we have to see what universes might actually be profitable.”
He did acknowledge that metaverse is “thought-provoking” and likely to have a future with certain brands, but added that he was “watching to see how it generates a profit”.
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“It will be interesting to see how it generates profit. NFTs are generating profits, and I’m sure this will have a positive effect if things are done properly,” he said.
This statement came even as a virtual Gucci bag sold for $4,500 on Roblox and others such as Balenciaga, Burberry (collab with Mythical Games for NFTs) and Nike (acquired digital sneaker brand RTFKT, which has sold 600 pairs of virtual shoes for $3.1 million) are making moves towards digital profits, it noted.
LVMH, on January 27, posted record sales and net profit for 2021 – 64.2 billion euros ($71.5 billion), more than recovering from the coronavirus pandemic. LVMH includes the Louis Vuitton, Dior and Celine fashion brands as well as Moet & Chandon champagne.
An increase of 44 percent from last year, when the sector took a major hit from store closures, was also a 20 percent rise from before the pandemic in 2019. Net profit hit 12 billion euros, a 156 percent increase from 2020 and up 68 percent compared to 2019.
(With inputs from AFP)