For the French luxury, the crisis is already over
February 28th, 2011
The luxury groups have achieved record results for 2010, and began the year 2011 with confidence. The sector is driven by demand from emerging countries, especially from Chinese millionaires
The luxury companies are euphoric. In 2010, LVMH recorded 20.3 billion euros in sales, up 19%, and net income of 3 billion euros. By comparison, the net result of Carrefour in 2009 amounted to 385 million euros, almost ten times less.
Before Christmas to avoid stockouts, Louis Vuitton had closed an hour earlier his French stores. To meet demand, the group will “increase the capacity of workshops and make more use of our subcontractors,” said the CEO, Bernard Arnault. The champagne (Moet & Chandon, Veuve Clicquot, Dom Perignon), he acknowledges that, given the restart, “we will find ourselves a little short bottles.
Same scenario at the competitor Hermes, whose sales jumped 25% in 2010, reaching 2.4 billion euros there this year includes 160 recruits. In Germany, Hugo Boss has completed “the best year ever.” The Swiss watchmakers such as Tag Heuer or Breitling encounter supply problems to cope with soaring demand, despite the appreciation of the Swiss franc.
A growth rate of 9 to 11% worldwide
United States, the jeweler Tiffany feels “on track” to establish a record annual sales. The sector as a whole has a growth rate of 9 to 11% in the world after a contraction of 8 to 10% in 2009. That year, in a context of crisis, consumers spent more soberly, and department stores had significantly removed from storage.
Beyond the numbers, the luxury market benefits from favorable trends, many years. “Consumers have changed their behavior,” says Jean-Marc Bellaiche, senior associate director at consulting firm Boston Consulting Group (BCG).
Better informed, they make choices marked. On non-”differentiation” for them, they buy at low prices. This has enabled the development of low cost carriers and distributors discount stores. However, the categories considered more emotional and identity, they turned towards the high end. They spend a budget of more and more important. ”
A phenomenon strengthened by the increase in living standards in emerging countries, and tourism development. “The surge in major cities in Europe, Chinese and Russian tourists fueling strong growth in demand for luxury products,” says Preeti Rambhiya, equity analyst at Standard & Poors (S & P) in London.