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LVMH luxury sales soar as consumer spending returns

LVMH luxury sales soar as consumer spending returns

LVMH, the world's biggest luxury goods firm, has said it believes consumers are back in the spending habit.

The group reported a forecast-beating 13% rise in like-for-like sales in the three months to 31 March, helped by strong growth in the US and Europe.

The Paris-based maker of Louis Vuitton handbags, Hennessy cognac, and Tag Heuer watches saw sales top 4.47bn euros ($6.3bn; £4bn).

LVMH said that all its five divisions saw double-digit revenue growth.

The luxury goods industry has been hard hit by recession, but consumer spending is up and companies are replenishing their stocks, LVMH said.

 

"The group continues to perform well in Asia and has seen a strong rebound in the US and Europe," the company said in a trading update.

First-quarter sales at its wines and spirits unit, which makes Moet & Chandon and Ruinart champagne and Glenmorangie whisky, rose 20% to 635m euros.

LVMH's watches and jewellery business, whose brands include Chaumet, reported like-for-like growth of 34% to 204m euros.

In the company's biggest segment, fashion and leather goods, sales rose 10% to 1.7bn euros.

Last week LVMH announced plans to expand in the luxury hotels business, starting with two projects in the Middle East in partnership with Orascom Holdings.

Analysts at HSBC bank said in a research note: "There seems to be a perfect alignment of stars for LVMH at the moment."

And Dennis Weber, of Evolution Securities, said: "The performance looks very impressive and of high quality."

Posted on Tuesday 13th April 2010

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