Vuitton maintains momentum amid slump in luxury sector

LVMH Meet Hennessy Louis Vuitton SA, the world's largest luxury-goods company, expects monogrammed denim handbags, eyewear created with a hip-hop music star and bags with cherry prints designed by, a pop artist to help boost the company's most profitable business.

Louis Vuitton designer Marc Jacobs created LV monogrammed jeans and denim handbags trimmed with crocodile skin for his spring-summer 2005 collection, which also previewed eyewear designed with hip-hop music producer PhtuTell Williams and bags decorated with cherry prints by pop artist Takashi Murakami.

"The ready-to-wear show is a good way to bring energy to our bags and accessories businesses as well,'" Yves Carcelle, director of LVMH's fashion division, said in an interview alter the show, held at Serre du Pare Andre Citroen in Paris.

Chairman Bernard Amault is focusing on keeping up momentum at Louis Vuitton, which generates about 60 percent of the group's operating profit and about 25 percent of sales. A threeyea slump in the $74 billion luxury-goods business has made it more difficult to turn around underperforming lines such as Fendi and Pucci. LVMH also owns the Givenchy and Donna Karma brands, among others.

The collaboration with Murakami on the cherry prints follows Louis Vuitton's first project with the Japanese artist two years ago. which produced a best-selling and widely copied line of bags with multicolored LV initials on a white background known as the "Eye Love You" collection.

"Product is key, and creativity is the power behind the brand." Carcelle said. The new products haven't been priced yet.

Handbags represent one of the most profitable segments of the luxury-goods business because they have a longer shelf life and don't have the fitting and sizing requirements of clothing.

Louis Vuitton is also expanding its jewelry business, which started with a charm bracelet designed by Marc Jacobs two years ago, into a full line called "Enprise" that features luggage motifs and monogrammed flowers.

The 150-year-old brand, which already operates more directly owned stores than any other luxury brand, is keeping up its pace of opening about 15 stores each year, Carcelle said. Louis Vuitton recently opened its 335th store, in Johannesburg, South Africa. Last month, Louis Vuitton opened a 13,000 square-meter store in Shanghai, its 14th outlet in China.

"This shows that we are rapidly penetrattrig new territory' while continuing to grow in traditional markets such as North America." Carcelle said.

Last month, LVMH said first-half profit rose 49 percent as travelers returned to its Asian airport stores and U.S. shoppers bought more champagne and cognac. Operating profit at the fashion and leather goods unit, which includes Louis Vuitton, was unchanged at 634 million euros ($787 million).

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