This week is continuing to be a rollercoaster of ups and downs for the luxury goods industry.
We’ll start with the up side: Bloomberg reported that LVMH Moet Hennessy Louis Vuitton SA’s third-quarter revenue beat analysts’ estimates after “exceptional” demand for Louis Vuitton bags in China. LVMH shares also rose 3.4 percent, to their highest point in more than a year.
Now to the down side: The Wall Street Journal revealed that PPR SA announced a 7.6 percent decline in third-quarter revenue as sales slumped in almost all divisions. "PPR faced the convergence...of several unfavourable factors," said Chairman and Chief Executive François-Henri Pinault, citing a lacklustre macroeconomic environment and lower tourist activity. He said the company plans to re-double their efforts to revitalise its business units with marketing initiatives.
Unfortunately, the bad news continues with Coach reporting a 3.4 percent drop in their fiscal first-quarter profit. But according to The Wall Street Journal, they are planning to reverse that trend by opening a flagship boutique in China and an Asian distribution centre. They are also wooing the budget-conscious consumer with their new Poppy collection, and are expanding their lower-priced handbag range.
For our detailed critique of Coach, consult the MO Down for July 20: Coach Is A Clear Winner In Tough Times.