LVMH face the dilemma of success

In July this year, Louis Vuitton opened its first home in China - a business statement that will impress. It was started by a lavish party attended by celebrities including French actor Alain Delon and Bernard Arnault, head of LVMH, the luxury group that owns the trademark Vuitton. The four-storey building in Shanghai - this is a positive metal and glass facade, echo the pattern of monogram mark sign - has "come to a confirmation of the described our market leadership, hopefully for many years." Yves Carcelle, head of Louis Vuitton, as Prada Top Handles Bags But this week, LVMH reported this week, lower than expected organic revenue growth of 6 percent in the three months to end-September compared to the same period last year - has put some questioned whether the spectacular growth of Louis Vuitton in the last 10 years to 15 years can be supported by Jordi Constans, yogurt will take over a former French director maker Danone, Mr. Carcelle at the end of the year. LVMH said exceptionally strong growth last year, making comparisons difficult. He also said that the labels other than the star-brand Vuitton were mainly responsible for the slightly lower sales in the third quarter of its fashion and leather goods. Note, however, analysts believe that other brands - including Hermes, Prada and Bottega Veneta PPR - grew faster. "This is one of the mildest growth that Louis Vuitton has in the past 12 years, we have covered LVMH," said Melanie Flouquet, an analyst at JPMorgan. Commission considers that the organic growth slowed by LVMH fashion and leather goods 5 percent in the third quarter and 1 percent in Asia. The slowdown in Asia is of particular interest, as the region generated 35 percent of group sales last year - making it the largest contributor. LVMH owns more than 60 brands, but it is heavily dependent on high-margin Louis Vuitton, which accounted for 30 percent of group sales last year, according to Mintel, the market research company. The group itself does not break Vuitton figures from the rest of the fashion and leather goods division, which last year generated half of LVMH and profits. Some believe Vuitton slowing organic growth is cyclical in nature, the. The impact of the economic slowdown in China and a few new stores in the country Paul French, chief strategist at Mintel, the Chinese market, said that more Chinese buy luxury outside of China to escape high taxes. LVMH believes it. No question of growth "We came years of double-digit growth for years, including in the first nine months of this year," a spokesman said, referring to the 16 percent recorded growth of fashion and leather goods. "Louis Vuitton has the potential to continue to grow because of the prospect of the emerging markets." But others think Louis Vuitton can provide structural problems related to their size - the total turnover last year 6500000000 € - and his brand. "Louis Vuitton is one of the most powerful brands in China, but it is the question of how to grow further difficulties due to its size," says Jean-Baptiste Danet, CEO of Dragon Rouge, a brand consulting firm. Mr French said: "Although Louis Vuitton has long been the word luxury reigned in China, it is now Chanel, Lancôme and Gucci are the most popular brands in general." Distinctive Louis Vuitton logo - often copied - could also be a disadvantage for the consumer can be more challenging. "This is a problem for many brands, the product range is very focused on the logo," Claudia D'Arpizio, the board said responsible luxury bath. "Bain sees a trend to more sophisticated consumers in China, especially consumers in Tier One cities and consumers who traveled extensively. Logos visible still a place for buyers who are only in the luxury consumer." The launch of the new store in Shanghai is part of a strategy project exclusively for high-end customers. "Revive The new high-end super luxury flagship store new and reinterest consumers and not Shanghai blunted by invitation only soils and extremely expensive bags with rare skins," says French. "So in reality, the brand brown and gold LV bags become a hallmark of diffusion for the plaintiff and striking blingy and the first generation, while the super-rich are super-expensive Louis Vuitton." Antoine Belge, an analyst at HSBC Bank, which downgraded recently to neutral from overweight LVMH said: "The big question for the future of the new providers is on the Chinese market for luxury goods, choose a Louis Vuitton bag as his first to be as more to do for that day, or another brand? "