eBay, the internet auction site, has been fined €1.7 million by a French court for failing to prevent the sale of luxury perfumes and cosmetics by its users.

It is the latest development in a series of legal battles between eBay and luxury goods manufacturers, which accuse the online retailer of not doing enough to stop its users trading counterfeit items.

Full story at Times Online.

Luxury positioning, especially for the potential – as opposed to the existing – market is all about aspirational and slightly out of reach desirability.  With this in mind LV have created a very neat piece of digital content in ‘SuperFlat Luxury’ to hook Japanese schoolgirls, with a crystal clear call to action for mobile seeding and a very compelling Alice In Wonderland brand story.

TRAILER – COUNTERFEIT CONSPIRACY – XXXX MAGAZINE

done

“COUNTERFEIT CONSPIRACY” is a 15 minute documentary exposé focusing on the controversy surrounding the sale of counterfeit luxury goods and the “links” to funding terrorism and other underground criminal activities. Directed by Indira Cesarine, edited by Randy Wells. Premiering on the XXXX MAGAZINE site.

Leto 2009 za mnoge modne ponudniki sploh ni tako črno.

Index Pambianco, ki spremlja gibanje tečajev ključnih modnih ponudnikov, ki kotirajo na evropskih in ameriških borzah, je v letošnjem letu zrastel v Evropi za 34% in malenkost manj v ZDA, za 28%.

V Evropi so v letu 2009 najbolj zrasle vrednosti delnic:

Burberry  +143,8%
Swatch  +72,6%
Tod’s  +69,5%
Puma  +64,1%

Trije največji se dokaj dobro držijo. Spodaj njihova kapitalizacija v milijardah EUR in rast delnice od 1.1.09

LVMH  |  36.059  |  +57,8%
H&M |  33.668  |  +35,6%
Inditex |  26.566  |  +35,3%

THE luxury goods industry, struggling through a recession that has threatened some well-known names with extinction, is trying to use technology to its advantage.

Many in the fashion business remain wary of the Internet, partly because of continuing legal battles over online sales of counterfeit goods and concerns about diluting carefully honed brand images. Many companies also have failed to execute online storefronts successfully. But executives say that attitudes are softening as brands realize that the Web provides one of the last untapped sources of potential growth.

Federico Marchetti, the founder of Yoox, a company in Milan that runs retailing sites for luxury brands like Valentino, Emilio Pucci and Jil Sander, said many labels were skeptical not long ago.

“Now,” he said, “it is the opposite.”

The move to capitalize on the Web has become a financial imperative. Analysts at Bain & Company estimate that the sales of luxury goods will fall to 154 billion euros this year ($229 billion), from 170 billion euros in 2008. It is unlikely that online revenue — still only a tiny fraction of the total — will make up the difference soon.

One of the most successful ventures on the Web has been Net-à-Porter, a site based in London that sells high-end fashion and accessories, delivering them to homes or offices in black boxes. Though sales in the United States slowed during the depth of the recession, they have since recovered and have continued to rise at double-digit rates in other markets, the company said. It expects sales this year to top £100 million ($168 million), up from £82 million last year.

“It just made a lot of sense to allow women to shop when they wanted to shop, how they wanted to shop — at work, at home, in bedroom,” said Natalie Massenet, the company’s founder.

At a time when trundling along high-end strips like Bond Street in London or Avenue Montaigne in Paris with an armful of shopping bags seems out of touch with reality, Net-à-Porter may have benefited from the greater discretion that its service offers. Last year, to cloak purchases even more, the company added a brown-bag delivery option. This year, in another bit of good timing that Ms. Massenet attributed to luck rather than foresight, the company added a new site selling fashions from previous seasons at reduced prices.

Customer overlap between the sites is only 6 percent, Ms. Massenet said, with fashionistas frequenting the original Net-à-Porter and bargain hunters turning to the new site, outnet.com.

That ought to comfort luxury executives worried that selling online might undermine the high-end appeal of their wares — and the high prices that come with such exclusivity.

Some individual brands that previously refrained from selling online have recently embraced the Internet. Hugo Boss, the German clothier, started introducing Internet shops in Europe last year. Now it is accelerating its online efforts, planning to open similar stores in the United States early next year and in Asia the year after, said Claus-Dietrich Lahrs, the chief executive.

Mr. Lahrs said Hugo Boss expected to sell more than 50 million euros of goods online within two years, up from a little more than 10 million euros this year.

While some labels are now trying to make up for lost time, others remain cautious about the pitfalls of the Internet.

Led by the largest company in the business, LVMH Moët Hennessy Louis Vuitton, luxury brand owners have fought a series of legal battles across several continents with Internet companies like Google and eBay, contending that they aided in the online sale of counterfeit goods. Courts have issued mixed rulings, sometimes siding with the brand owners and fining the technology companies, and in other cases agreeing that sufficient steps were being taken to root out fakes.

Some executives also remain reluctant to invest heavily in digital initiatives because of costly failures in the past. Uché Okonkwo, a Paris-based consultant, said that brand owners are “many steps behind the clients, when they should be several steps ahead of them.”

One brand that has won plaudits from analysts for its efforts is Burberry. This month, it created a social networking site that allows owners of Burberry’s trench coats to exchange stories about them.

Christopher Bailey, Burberry’s chief creative officer, said high-end brands should go further in trying to give Web stores the rich texture of physical stores.

“Whether they are walking into our store on Bond Street or tapping in from India or China, it’s about making sure the consumer is getting the same experience,” he said.

From New York Times

I’ll never forget the day I bought my first shirt at Dior Homme. It was a totally transcendental experience. These were the days of Hedi Slimane, the hottest menswear designer on the planet. I would often go to the New York boutique just to see Hedi’s pieces in person. I was too poor to afford anything, and I didn’t have a credit card to max out. If I save, I thought, I could buy that $4,000 leather jacket. But even by the time I could save enough, we would already be beyond that season. Then, of course, Slimane left Dior so, so I had to act fast or miss out.

When I bought that shirt, I felt like I was taking a piece of Hedi home with me. I thought that the right people would see the shirt and know that I was wearing Dior. That I, too, was fabulous. What I’m finding in my dissertation research on performances of glamour and luxury is that this is a real experience – a real feeling that most people lust after, one that’s easier to achieve than ever before.

Today, I was doing some research and I came across a fascinating quip by Bernard Arnault – the overlord of LVMH Moet Hennesey Louis Vuitton, the largest luxury conglomerate in the world. Arnault said that luxury products wield so much power on us that we feel as if we “have to buy it. You must buy it, in fact, or else you won’t be in the moment. You will be left behind.”

And that completely sums up how I felt when I bought that little Dior shirt, or why I felt like it was a matter of life or death that I find a way to drop $3,000 on a leather jacket I couldn’t afford.

This is how the luxury industry works, how they suck us in. They put young, avant garde, sexy designers at the head of stodgy old fashion houses to create excitement, to generate the buzz, to renew the brand. Sex always sells. Then they come at us with “cheap” perfumes, watches, handbags, and t-shirts – things that most everyone with a job or moderate credit limit can afford. The Alexander Wang “Coco” bag sells out before you finish saying the designers name. Prada and Dior Homme are two of my favorite colognes, at about $65 a pop. This is the democratization of luxury.

In Dana Thomas’ book, Deluxe: How Luxury Lost Its Luster, the author laments this democratization and the shifting of true luxury away from specialized service and customization to the mass. But is that really such a bad thing? Is it bad that more people now have access to the dream of luxury? Especially now that the “luxury experience” is really everywhere, from Whole Foods to Rodarte for H&M. Forget capitalism; we are in an age of total luxury.

What I’m really interested in is the idea of “sold-outness,” and how that generates buzz for a particular purse or shoe, but also as an impulse that works on us as shoppers. Just what will we do to get our hands on a coveted “Birkin” bag? If ever you were skeptical about the importance of spectacular appearances, take a look at this: in 2009, Louis Vuitton clocked in as the 29th most valuable brand in the world, sandwiched between AT&T and HSBC.

Think about it: the top labels on the list include banks, communications firms – necessities, in other words. One of the questions I’m invested in with my research is what it means for a luxury fashion label – the most obvious of the labels at that – to be so highly ranked.

]]> http://paulacarravilla.wordpress.com/2009/11/17/una-vision-general-del-posicionamiento-del-lujo/ Mon, 16 Nov 2009 23:39:26 +0000 paulacarravilla http://paulacarravilla.wordpress.com/2009/11/17/una-vision-general-del-posicionamiento-del-lujo/

Una presentación en lineas generales de la importancia del posicionamiento en el sector del lujo. Desde el punto de venta, la publicidad o el packaging se hace un seguimiento del concepto por el que apuestan las distintas marcas.

Avec un actionnariat majoritairement détenu par la famille allemande Benckiser, le groupe de parfums et cosmétiques Coty, de droit américain, aime à cultiver une stricte politique du secret. Créée en 1904 par le Français François Coty, cette société, qui réalise la moitié de son chiffre d’affaires grâce aux parfums Calvin Klein, vend les fragrances des griffes Cerruti, Chloé, Davidoff, Jil Sander, Marc Jacobs ou Lagerfeld… et des parfums de célébrités tels que Céline Dion ou David Beckham, qui font fureur aux Etats-Unis ou au Royaume-Uni.

Très implanté outre-Atlantique, le parfumeur a subi la crise de plein fouet. “En deux ans, les ventes de parfums s’y sont contractées de 18 %, malgré leur progression sur Internet”, explique au Monde Michele Scannavini, président de Coty Prestige. Ce qui a obligé le groupe à procéder à des licenciements. Les ventes ont fondu de 4 milliards à 3,7 milliards lors de l’exercice clos en juillet 2009.

M. Scannavini reste toutefois optimiste : “On commence à voir quelques signaux positifs, le grand phénomène de déstockage est presque fini et les ventes redeviennent régulières, en phase avec les ventes effectuées.” Il parie sur une amélioration des ventes, un peu par défaut, au premier semestre 2010, parce que la base de comparaison – le premier semestre 2009 – s’est révélée franchement mauvaise.

La crise, tangible surtout sur le marché américain, n’a en tout cas pas retardé ni reporté les lancements de nouveaux parfums. Le plus emblématique pour Coty sera Balenciaga Paris, en février 2010. Certains se souviennent encore des parfums mythiques de la maison comme Cristobal, Le Dix, Le Talisman ou La Fuite des heures. La licence des parfums Balenciaga est caduque “depuis quatre ans”, précise Isabelle Guichot, présidente de la maison de couture (filiale de Gucci, donc de PPR).

Artisan du renouveau de la marque, le designer Nicolas Ghesquière a renoué avec l’héritage des parfums. Après un apprentissage éclair aux rudiments de cet univers, le styliste a travaillé main dans la main avec le nez choisi par la maison, Olivier Polge. “Nicolas est arrivé avec une demi-savonnette, des souvenirs, des odeurs d’enfance comme l’encaustique et un attrait pour les fleurs fraîches”, dit-il. En huit mois, ce parfum a vu le jour : il est chypré, aux essences de vetyver, de cèdre et de patchouli, à base de violettes rehaussées d’une pointe de piment.

Odeur fétiche

Isabelle Guichot parie sur un retour sur investissement la deuxième année et des profits l’année suivante. Fabriqué en France, à Chartres, vendu cher (75 euros les 50 ml d’eau de parfum), il sera commercialisé dans un circuit très restreint, chez 15 % à 20 % des distributeurs sélectifs mondiaux. “On était très pressés, on aurait aimé le sortir plus tôt, mi-2009, mais bien nous en a pris, nous serions tombés au plein coeur de la crise”, explique la présidente de Balenciaga.

Selon Philippe Benacin, PDG d’Interparfums (Burberry, Lanvin, Van Cleef & Arpels, etc.), le marché français du parfum est estimé à 1,6 milliard d’euros en 2008. e janvier à juillet 2009, il a baissé de 1,4 %. “C’est un marché très mature, dont le potentiel de croissance ou de décroissance est faible (de + 3 % à – 2 %) “, dit-il. Un atout en période de crise. Avec une caractéristique, les consommateurs sont très attachés à leur odeur fétiche : les ventes de nouveaux parfums ne représentent que 10 % à 15 % du marché. Une compétition d’autant plus rude que les griffes sortent une trentaine de nouvelles fragrances par an sur un total de 500 nouveautés.

En France, le marché reste largement dominé par L’Oréal, Chanel et Parfums Christian Dior (LVMH). Selon une récente étude de Plimsoll sur les 329 sociétés françaises de fabrication de parfums et de produits cosmétiques, 125 ont atteint des “performances financières remarquables, avec une croissance des ventes de plus de 4 %, une marge de bénéfice moyenne de 9,2 % et un endettement inexistant”. Le cabinet d’études juge qu’en 2008, Interparfums, Jacques Bogart, Jean Paul Gaultier, Kenzo, Cartier, Christian Dior et Ted Lapidus affichent une note financière “forte”, là où Chanel, Guerlain, Mugler et Givenchy sont “bons”, tandis qu’YSL, Caron ou Nina Ricci sont “en danger” et Annick Goutal et Rochas dans une situation “préoccupante”.

Au niveau européen, le marché du parfum a très légèrement augmenté en 2008 (+0,4 %) à 10,7 milliards d’euros, selon le Colipa, l’association européenne des industriels du secteur. La France caracole en tête des ventes, devant l’Allemagne, le Royaume-Uni et l’Italie. La cible des consommateurs – largement dominée par les femmes – s’élargit aux adolescent(e)s et aux hommes. Comme dans les autres secteurs du luxe, le Colipa parie sur une croissance des pays émergents. Notamment le Brésil, qui, “d’ici à 2013, pourrait devenir un marché comparable à l’Amérique du Nord et au Japon”.

Nicole Vulser

Fonte: Le Monde

Le luxe est à la mode. Alors, quand on parle de la mode et du luxe, on ne peut que penser à LVMH.

Le groupe est un modèle de réussite du luxe français.

Just as well that the faux-fur polar bear in [she who shall remain nameless]’s latest video was (re)-made by Benjamin Cho and NOT Louis Vuitton, otherwise, the “huge cult following of almost crazy people” a.k.a. LV fans would be rabid on the Champs-Élysées…according to Marc Jacobs at least.

In his latest interview with The Times, Marc gives reason to why LV has managed to survive/do so well in the recession:

In terms of what’s selling at Louis Vuitton, the recession hasn’t changed anything. I’ve cut back, because my partner Lorenzo and I are buying a house in the West Village in New York. And obviously there are a lot of people suffering out there, but our sales are up and I haven’t noticed that people’s tastes have got more subdued. They may be buying less, but if anything, they want it to be even more special. There’s this huge cult following of almost crazy people at Vuitton who just want whatever they buy to be exclusive. The charity angle also means that people feel more comfortable about spending openly.

The interview took place to mark 150 years of the Red Cross, for which Marc has created a Louis Vuitton dog carrier. “L’Excellence du Savoir-Faire” will be at Sotheby’s, London, from November 13. The auction will occur on November 17, by invitation only; louisvuitton.com

(Bloomberg) — PPR SA, owner of the Gucci brand, reported sales that missed analysts’ estimates after demand weakened across the French company’s markets, from luxury to furniture and African goods distribution.

Gucci Group’s figures are worse than those posted earlier this week by the company’s largest rival, LVMH Moet Hennessy Louis Vuitton SA. The Vuitton brand had “exceptional” demand for its handbags in China, LVMH said, helping boost revenue from fashion and leather goods 5.3 percent in the third quarter and offset weakness in smaller labels like Fendi.

Source:Bloomberg.com

1. The relative of Indian Billionaire, Megha Mittal bought Escada, the German brand that filed for insolvency earlier this summer.

2. Harvey Nichols chief executive Joseph Wan has warned the luxury market will not recover from the global banking collapse for at least five year.  There has been a change of the total land scape in luxury retailing. It will open a floor in Feb devoted to a more accessible fashion offer to counter shifting shopping habits. The business has no changes to its wealthy shopper’s spending habits. At the moment, we are continuing to see significant growth. The growth is occurring on brands on a higher level such as LV, Chanel and Christian Dior.

3. PPR, the owner of Gucci group reported the sales in the third quarter dropped 8%, the decline was blamed on weak wholesale sales, tough exchange and  a drop in tourism.

4. Generation X marks the spot for retailers. Women born in the 1960s and 1970s have cash in their purses and an appetite for trend-driven fashion, marking them a tempting proposition for womenswear retailers. Those aged between 30 to 45 are the age group where spending has grown most in the last year. Ease of shopping is one thing important to them. Quality and design details are very important to them. Mint Velvet targets for 30-plus women.

5. Louis Vuitton reported a double-digital rise in sales over the nine months to Sep 30. The luxury brand’s success boosted the performance of LVMH.

6.  China data shows economic rebound,especially in factory outputs and retails.

Après Robert Badinter, Toni Morrison, Anselm Kiefer et Pierre Boulez, Le Louvre invite Umberto Eco en novembre 2009. Sur le thème « Vertige de la liste »,  l’écrivain a imaginé une programmation pluridisciplinaire en art, en histoire de l’art, en littérature et en musique.

“Une liste c’est l’énumération de choses essentielles ou futiles, c’est l’arrangement aléatoire ou structuré d’éléments cohérents ou disparates, c’est un classement toujours provisoire, c’est l’organisation incongrue ou harmonieuse d’objets réels, virtuels, imaginaires ou symboliques, c’est  l’entassement volontaire ou hasardeux d’ensembles homogènes, c’est l’accumulation de définitions nécessaires ou chimériques, c’est l’aboutissement dialectique du dialogue utopique entre le rêve et la raison. C’est le vertige qui nous prend devant l’agencement impossible du monde”

En tant qu’étudiante en communication, je suis une fervente admiratrice du travail d’Umberto Eco. Il me tarde donc de découvrir le cycle de conférences, Art contemporain Face à Face vendredi 13 novembre à 20h. La littérature avec un travail sur l’oeuvre de George Pérec par Carole Bouquet et l’Oulipo le 16 novembre à 20h30 mais aussi la projection concert samedi 12 et dimanche 13 décembre avec Laurent Garnier!!

Manifestation soutenu par LVMH

Retrouver toute la programmtion sur le site du Louvre

Shortly after the Falics purchased Lacroix from LVMH in 2005, they tried to run the house on a budget. Yet at the same time, they wanted the label to be among the highest-end on the market. They quickly canned Lacroix’s lower-priced Bazar and Jeans lines. Lacroix was delighted not to have to bother with cheaper lines anymore. But it wasn’t long before suppliers failed to receive checks, new suppliers had to be found, and Lacroix was back to the cheap stuff. He was supposed to produce, as he says, “the ‘It’ bag in cheap leather.”

Although his fall 2009 collection was heralded and Barneys placed a large order for it, that line won’t be produced. Neither will his cruise collection. Which means Lacroix boutiques will have to close in September. The label has hardly been able to fill orders for the couture collection presented in January, even though some devoted clients paid up front for the pieces so that the label could buy the supplies needed to produce them. “I struggled to make the dresses for the [Marielle] Safra wedding,” Lacroix says.

So that’s how a celebrated, revered label goes to pieces. Lacroix says the Falics didn’t want him to stage a couture show this week (he did anyway because he wanted his employees to have work). Maybe they foresaw the flood of publicity their mistakes would receive.

Lacroix has until the end of the month to find a buyer. His banker friend David de Rothschild is helping him locate new investments from people who know what they’re doing. Lacroix says he’s met with “some important people” and will only see those “ready to support couture.” But whoever wants to invest will have to cough up about 40 to 60 million euros over the next few years. Although speculation has surfaced that LVMH might scoop up Lacroix again, no one at the company has said anything to indicate it actually will.

Lacroix thinks the Falics would rather just see the house go under. Sadly for them, the entire fashion industry holds out hope the label will survive.

If you like this article you will like this one also: 

 http://nymag.com/fashion/09/fall/58329/

http://www.style.com/vogue/voguedaily/2009/07/exclusive-christian-lacroix-reveals-all-to-hamish-bowles/#more-2063

Market Analysts See Foreign Investments In Chinese Traditional Liquor As Smart Move To Cash In On Emerging High-End Domestic Consumer

LVMH's baijiu joint venture with Wenjun Distillery could be a huge money-maker in China; But will it appeal outside the country?

Although most westerners may be unfamiliar with baijiu, the traditional spirit of China, drinkers within the country have been sipping the powerful, often tear-inducing alcohol for centuries. Less famous abroad than Japanese sake or Korean soju, two of its descendants, baijiu is most certainly big business in China, with the most expensive bottles often selling for more than $10,000 USD. This high-end spectrum, populated by rare bottles produced by only a handful of companies, has apparently garnered the attention of more than one foreign company looking to get a piece of the premium baijiu market, as Diageo bought a 43% share in baijiu producer Sichuan Chengdu Quanxing Group last year and, recently, LVMH Moet Hennessy acquired a 55% stake in one of China’s top producers, Wenjun Distillery.

This acquisition should fit seamlessly with Louis Vuitton Moet Hennissey’s broader China strategy. As we wrote earlier this week, LVMH is making a massive push into the Chinese market, buoyed by figures that indicate China has leapfrogged past traditional luxury markets like the United States this year and should surpass the Japanese market within five years. Acquiring a premium baijiu with real brand pedigree — the first Asian brand to be owned by the LVMH group — is being greeted as a gutsy move, as the high-end baijiu market is both exclusive and highly competitive. As Karen Cho writes, the acquisition of Wenjun has huge potential as incomes grow throughout China, but — as uncharted territory – presents LVMH with a host of new challenges:

“This is the first experience for the whole LVMH group owning an Asian brand,” says Allan Hong, development manager at Sichuan Wenjun Spirits Sales Company. “Because of the great potential in China, the whole group decided to run the Wenjun brand as a super-premium brand in China,” he adds.

The article goes on to discuss increased foreign interest in the high-end baijiu market, exemplified by Diageo’s investment, and looks at some of the unique cultural challenges presented by the Chinese market, such as Chinese drinkers’ preference for drinking baijiu at restaurants rather than nightclubs:

[A]s LVMH had always targeted modern nightspots, and no one was drinking bai jiu in those outlets, they had to shift its focus to Chinese restaurants.

This, Hong says, posed an immediate challenge, because LVMH’s sales force had relatively less experience with Chinese restaurants.

“So (in our) communication with our distributors, with restaurant owners, we have made a lot of efforts to understand their needs and (also) what their consumers want in those kind of outlets.”

Although LVMH will undoubtedly face massive difficulties in this vast yet complex market, the combined brand power of LVMH and Wenjun names should give the new joint venture a leg up in the market. As Allan Hong says in the article, it is all about serving the lucrative but mysterious niche market of super-premium baijiu drinkers: “[With this joint venture,] we want to capture this opportunity; we want to get a niche market that only belongs to ourselves.”

while we struggle to maintain sales numbers here in luxury markets in the US, china seems to be booming. interesting little fact, the chinese population expands by 10,000 annually & is expected to peak at 1.86 billion by the year 2030. with those numbers, its no wonder demands are reaching elevated levels beyond the US & european markets. in accordance with the escalating demands, companies, like the gap, are looking to expand in the chinese republic as well. taking advantage of a booming population can only benefit the lackluster numbers of the san francisco based retailer. though sales aren’t as lively for the gap as they were around 1998, the company still has a hold on the apparel market as “the largest U.S. apparel retailer by revenue“. while remaining on top of their game in revenue with as a stateside company, its only necessary for china to be the brands next conquest as their poplation edges closer & closer to out-populating the globe. plans to open the gap in china are scheduled for the first quarter of 2010.

beyond the walls of the gap & its cohorts like banana republic & old navy, are high end markets. much like the gap, other brands are looking to seek a rise in profits for their own businesses in keeping up with the climbing numbers of the chinese population. while sales at the gucci group have reportedly fallen to 6.4%, brands like louis vuitton are at a higher revenue expectance; thanks to the higher demand for the label in china. LVMH (louis vuitton moët hennessy), which owns louis vuitton, holds steady staying on top as the worlds leading luxury producing conglomerate. while gucci is sitting back debating over deliveries in a whole sale market, louis vuitton steadily climbs. reports say that the vuitton brand is ahead of the game in china, already conquering expansion in china. percentage jumps for gucci are reported to be 37%, which is major- but dont speak too soon because those numbers fall flat against vuittons 56% sales hop. reasons for vuittons unstoppable success in china is the brands ‘exceptional‘ demand for handbags. known rivals in the fashion game, gucci is nothing compared to the marketing giant of the house of vuitton. LVMH seen €11.9 billion in revenue for the first nine months of this year. within those first nine months the demand for luxury goods & fashion reached with the management group rose 7%, giving good reason for the french based luxury brand to open a location in mongolia. contributions to the louis vuitton revenue rise are being credited to the newly presented high end jewlery & damier graphite collections. while china continues to cash out bringing luxury brands & apparel companies, their higher demands & revenue calculations still come second to japan, as they reign supreme as the world’s largest luxury market. [SOURCE] 

Stock Price: €73
Conclusion: Stock price close to our valuation range (€75-80 per share). Current P/E look fair considering the resilience of Vuitton but also the low visibility affecting the rest of the portfolio.

Q3 sales down 0.6% reported and 3% like for like. No guidance given for the year.

Less de-stocking in Q3 but continuing weak demand for luxury products.
As expected, like for like growth improved from -7% in H1 to -3% in Q3 (-6% nine months). The bulk of the improvement comes from the segments which fared the worst during H1, watches, spirits and perfumes were less impacted by de-stocking in Q3. The activities which proved more resistant in H1, leather goods and retail, did not really improve in Q3. Vuitton was the exception with sales up around 7% like for like slightly up versus H1.
Q4 will face an easier comparison base (last year, sales were down 1%) notably in wines, spirits and in watches. According to the CFO, champagne and watches will continue to be affected by high inventories. In addition, reported numbers will be impacted by a negative forex swing, leading to -1.5% sales for the year.
We expect EBIT to decline by around 10% and EPS to fall 9.5% to €3.81 in 2009.

A quick turnaround in 2010 looks unprobable.
China might again drive sales growth next year. Chinese people make up around 18% of Vuitton sale and 15% of cognac revenues.
However, we do not expect a strong rebound in Europe, the US and in Japan which still account for the bulk of the spending. According to Bain experts, luxury sales could grow by only 1% next year, following 8% decline in 2009. Much of the industry’s upturn will depend on aspirational middle class customers who suffered from the crisis. Wines and spirits could grow faster helped by an easier comparison base.
Reported growth will also be held back by weaker dollar related currencies. We look for 2% growth in sales and 9% EPS to €4.17 per share.

M&A initiatives ?
We would be surprised by the sale of MH stake to Diageo at the bottom of the cycle. It would make sense if LVMH could acquire Hermes, Bulgari or Richemont…which are not for sale.
We think that LVMH should further concentrate resources on its key brands, Vuitton, Dior, Moet-Hennessy, Tag Heuer and Sephora. We are less convinced that investing in Kenzo, DKNY, Loewe, Celine or DFS will create shareholder value.

LVMH trades at 19.1x and 17.5x P/E based on our 2009 and 2010 estimates.
We estimate the valuation range between €75-80 per share, which does not leave much upside. Further rerating would require a return to high single digit growth momentum in sales, which seems difficult to achieve next year.

Growth Among Chinese Luxury Customers Pushes Them Beyond Japanese, Americans To Become Top Consumers Of LVMH Brands

Chinese drinkers have made the country Hennessy's top market, surpassing the United States

LVMH Moët Hennessy • Louis Vuitton S.A., the mighty global juggernaut, has had a bit of a rough year in the traditionally reliable markets of North America, Japan and Europe. Despite cutbacks in spending in these established markets, however, there have been bright areas for LVMH, namely in emerging markets like China and the other BRIC nations and pockets of Southeast Asia. In regions where LVMH has only operated for a few years, or a few decades at the most, newly rich consumers are opening their wallets and flaunting their wealth in a way never seen before — and all of this translates to high hopes for luxury’s standard bearer.

In the wake of the global economic crisis, China has leapfrogged its developed-world counterparts in many high-end segments, driven mainly by the country’s second-tier urban growth, which — fueled mostly by commodity industries like coal which have not been as badly affected by the downturn — continue to grow and attract foreign investment. Second- and third-tier cities, which have seen high-end foreign boutiques opening up only in the last few years, have been a boon to major foreign brands because customers in these smaller cities present virtually no signs of “luxury fatigue” and feel that expensive luxury brands are an excellent way of conveying their newly found status — the flashier the better.

Earlier this year, China surpassed the United States as the world’s second-largest luxury market, and the country has Japan, #1, firmly in its sights. Many analysts believe that China, given current growth figures, should overtake Japan as the world’s top luxury market within five years. So what does this all mean for luxury brands? Today, the Wall Street Journal’s Matthew Curtin looks into LVMH’s “China Syndrome,” and make the case that where LVMH goes, so goes the luxury industry:

Chinese customers, both at home and on holiday in the shopping malls around the world, have become the biggest buyers of Louis Vuitton clothes and handbags and Hennessy cognac ahead of the Japanese and overtaking Americans.

The French group’s exposure to China helps explains why it is pulling out of the industry slump faster than expected. The number of Vuitton stores in China will increase by half to 30 by year-end while Sephora, LVMH’s perfume retailer, will have 70 compared with 234 in home market France. Across the group, same store third-quarter sales fell 3% as robust Asian demand almost entirely offset falling sales of brandy, champagne, jewelry and watches — still shrinking as a result of continued destocking.

Where LVMH goes, the rest of the luxury-goods industry looks set to follow.

Spending On Everything From Luxury Cars To Private Jets Shows Ultrarich Chinese Are Unleashing Their Inner Conspicuous Consumer

The exclusive club of "ultra-rich" in China are splurging amid the ongoing global economic doldrums

An interesting blog post today at the Wall Street Journal, where Robert Frank points out that the global economic downturn has turned a new spotlight onto a once-unlikely savior — the Chinese [ultrarich] consumer. While this group is exclusive to say the least, particularly in terms of the miniscule percentage of the Chinese population that can live up to this title, the staggering dropoff of the once mighty American, Japanese and even Russian luxury showoff has pushed the Chinese super-spender into the leading role.

Though Frank’s potential nicknames for this ultrarich group of big spenders — “Deng Xiaoblings,” for one — are a humorous take on the subject, the repercussions of an Eastward shift of conspicuous consumption and luxury shopping sprees could mean a great deal for established western luxury brands. Just as the increased buying power — and desire for diversification — seen among Chinese buyers of everything from gold to real estate to luxury cars to Chinese antiquities and contemporary arts has affected those markets and caused everyone from Bugatti to Sotheby’s to focus far more strongly on the China market than ever before, this China-bound luxury shift could very well change the nature and corporate strategies of the global luxury industry.

From the WSJ:

Purveyors of posh have a new mandate: Go East!

An updated forecast from Bain & Co. out this morning shows a stronger-than-expected rise in luxury sales for Asia–especially China. It said it expects luxury-goods sales in mainland China to jump 12% this year.

Meanwhile, the U.S. luxury business continues its downward slide. Bain said it expects U.S. sales of high-end clothing, accessories, tableware, cosmetics and jewelry will drop 16% this year. Sales in Japan are expected to fall 10%. Europe is expected to post an 8% decline.

The question is whether this is a temporary or more lasting phenomenon.

…

[T]he Chinese are discovering their inner conspicuous consumer. Sales of everything from private jets to watches and jade-inlaid Ferraris are soaring.

If the growth continues, we will need a new name for this new breed of Chinese spender, akin to the Blingsheviks of Russia.

L’univers du luxe est celui du plaisir superflu. Il a trait à ce qui n’est pas nécessaire. Or, cette lacune semble induire la nécessité d’une inscription dans un cadre bien concret, et va de pair, avec le besoin de laisser un nom, une trace dans l’histoire. Pour Louis Vuitton, Gucci ou Cartier, l’intention de pérennisation de la marque par le mécénat culturel paraît tout à fait pertinente: associer le luxe, à une œuvre d’art, un événement ou une institution, et ainsi se rendre éternel. Bernard Arnault (LVMH) lors d’un entretien pour le Nouvel Observateur, du 19 septembre 2002 explique : « Pour moi, l’art est un antidote à l’éphémère ». Le sentiment de n’être qu’une flamme dans un courrant d’air, pour une marque de luxe, induit une révolte contre l’oubli. Ce désir de pérennité se traduit visiblement par l’art, puisque l’art perdure.

The world’s leading luxury  group LVMH has announced a turnover of an almost stable in Q3 to 4.135 billion euros (-0.6%), noting an “improved” compared to Earlier this year.For the first nine months of the year, LVMH reported a fall of 6% sales on an organic basis, to 11.946 billion euros against 11.959 billion over the same period in 2008.What could we possibly learn from this ?

LOUIS VUITTON Epi Leather Messenger Bag

Madeira, zinco, cobre e lonas impermeáveis. Assim, juntamente com muito apuro artesanal, começou a Louis Vuitton, em 1854, na França. Mas o que leva mulheres de todo mundo a ficar horas em uma fila para comprar uma bolsa cujo preço passa, facilmente, dos três dígitos? Patrick Vuitton, da quinta geração da família, explica que o segredo da marca é a presença de qualidade e exclusividade.

O jovem cofreiro, nascido na Suíça e criado em Paris, começou seu império produzindo malas e baús para o imperador francês Napoleão III e mesmo ao abrir a Maison Louis Vuitton, que leva seu nome, produzia artigos feitos sob encomenda. Desde o século XIX, seus produtos inspiram imitadores. A fim de acabar com as cópias, os baús foram os primeiros a levar a “Marque L. Vuitton” do lado de fora. Foi em vão. Afinal, até hoje a LV ostenta o título de campeã de falsificações.

Até meados de 1980, a Vuitton vendia apenas bolsas clássicas para um público restrito, porém fiel. Decidido a mudar esse quadro, o magnata francês Bernard Arnault comprou a grife e ergueu a LVMH (Louis Vuitton Moët Hennessy), maior conglomerado de artigos de luxo do planeta que  conta com marcas como Fendi, Moët et Chandon, Dior, entre outras. Para se ter idéia do poder da LV, cerca de 70% do faturamento do grupo provém de seus produtos.

Após a criação da LVMH, um pensamento tomou conta da Vuitton: em um mundo globalizado, havia um grande número de pessoas ansiosas para consumir luxo de qualidade. Cultuada por essa qualidade, a LV começou a se preocupar em lançar tendências convocando estilistas de renome como Vivienne Westwood, a rainha do punk, e Manolo Blahnik para reinventar seus acessórios. Não foi suficiente.

Arnault resolveu, em 1997, inserir na equipe de criação um estilista americano que estava fazendo muito sucesso por sua personalidade para criar a primeira coleção de roupas da marca. Logo nessa coleção, Marc Jacobs mostrou a que veio, transformando as bolsas da Louis Vuitton em coqueluche. Disposto a inovar, convidou pessoas do mundo da arte para introduzir um ar contemporâneo nos produtos, utilizando patchwork, grafite, mangás e as cores fluorescentes do diretor teatral Bob Wilson. Sob o comando de Jacobs, a marca cresceu 80%, conservando intacta sua tradição de mais 150 anos. Assim, os artigos da Louis Vuitton são objetos de desejo que despertam inveja e transbordam glamour. Confeccionados em números limitados e com preços “sob consulta”, muitas sonham ter, nem todas conseguem.