LVMH opens stores in Oslo, Kiev, Budapest to boost sales
LVMH Moet Hennessy Louis Vuitton SA will open its first luxury stores in Norway and Ukraine as „exceptional” European growth fuels demand, the head of the company's largest division said. Louis Vuitton will put outlets in Kiev and Oslo before the end of the year and opened its first Budapest store in July, Yves Carcelle, director of LVMH's fashion and leather unit, said in an interview at Paris Fashion Week on Sunday. The luxury-goods industry's sales are growing the fastest in more than five years, according to research from Standard & Poor's. LVMH, the world's largest luxury company, expects its recently reopened flagship on Paris' Champs Elysees to attract 1.5 million visitors this year, including Russians flush with oil wealth and Europeans benefiting from the fastest economic growth since 2000. „We have continued to invest in Europe and we are now seeing the dividends,” said Carcelle, whose unit accounts for about 55% of the company's profit. Russian customers „are shopping in Russia and also travel and shop in Europe. Long term, I am a strong believer in Europe.” LVMH on September 7 said H1 profit rose 46% as European shoppers bought more monogrammed Vuitton handbags and Tag Heuer watches. Sales rose 13% to €6.97 billion. Shares of LVMH slipped 95 cents, or 1.2%, to €80.85 in Paris. They have gained about 8% this year.
„I cross my fingers” that European sales will be sustained, Carcelle said. A Bloomberg survey of retail executives released last week showed sales in the 12 nations using the euro rose for a sixth month in September. The European Commission expects the euro-zone economy to expand 2.5% this year, the fastest since 2000, though higher borrowing costs may slow growth in 2007. Bulgari SpA, PPR SA, Hermes International SCA and LVMH all cited stronger European demand in their reports for the H1, when sales for the industry as a whole gained an average of 14.5%, the fastest in more than five years, according to S&P equity analyst Alessandra Coppola. „The market has split between the entry price level and the high end,” said Francois-Henri Pinault, CEO of PPR, the owner of Gucci Group NV, in an interview in Paris on October 5. „New tourists from Eastern Europe and China are bringing dynamism to the luxury brands. Real economies in France and Italy are not that good.”
Louis Vuitton operates 360 stores around the world, of which 85 are in Europe. Hungary joins the Czech Republic in getting a Vuitton outlet among countries that joined the European Union in May 2004. „Fifteen years ago, there was a wall that cut Europe in half,” Carcelle said. „Now those countries are not only part of the European Union, but they also have a Louis Vuitton store.” The company, which opens an average of 15 new stores each year, is also adding outlets in China and the US, he said. Louis Vuitton is also stoking demand by introducing a new line of handbags called Damier Azur, which ship to stores next month. The collection, based on an original beige and brown check motif first introduced in 1888, includes a Pampelonne model for €1,250 and a Noe version for €565. For spring-summer 2007, Louis Vuitton's creative director, Marc Jacobs, sent models wearing ruffled tulle skirts and drawstring shirt dresses down the runway in Paris' Petit Palais Sunday afternoon as guests including singer Janet Jackson looked on. Accessories included new versions of the house's classic LV logo with applications of lace and patchwork patterns intertwined to spell „LOVE.” (Bloomberg)
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