LVMH, Kering and other French luxury groups are thriving

PURVEYORS OF BLING ought to be in a bit of a funk these days. Chinese economic prospects are mixed and American retail sales fell unexpectedly in September for the first time in months. Hong Kong, the spiritual home of luxury in Asia, is rocked by a hailstorm of rubber bullets. Economic crystal-ball gazers are slashing their forecasts: on October 15th the IMF warned global GDP growth would fall to its lowest level since the financial crisis (see article). Who would shell out on a new gold-studded designer handbag now?

Some shoppers seem to have missed the gloomy headlines. On October 9th LVMH, the world’s biggest luxury group, unveiled stellar results. Sales at its Dior, Louis Vuitton and myriad other brands went up by 11% year on year (excluding acquisitions). That is nearly double the 6% trend rate of growth in personal luxury goods, which includes everything from watches to ties and posh heels. Its high-end rivals, Kering, which owns Gucci, and Hermès, are expected to follow suit. Their share prices all rose by give or take a third in the past year.

Other brands have not been so lucky. A day after LVMH’s shiny earnings Hugo Boss, a German fashion house, issued a second profit warning in as many months. In America Tiffany & Co. and Tapestry,...



via Business Feeds

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