Thursday, 22 October 2009

Louis Vuitton Streaks Ahead Due To Strong Demand In China – 22/10/09

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.

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury,