LV, Dior And Other Luxury Goods Prices Do Not Fall, But Business Is Booming.

It is hard to imagine that after the financial tsunami swept the globe,

Business is more prosperous.

Louis, mohin group (LV), a well-known luxury brand maker named Louis (Vuitton C), C line, Givenchy and Guerlain, announced its sales in the first quarter of 2012, reaching 6 billion 600 million euros, up 25% over the same period last year, which is higher than market expectations. According to the fixed exchange rate, the total revenue of the group increased by 14% compared with the same period in 2011.

The group continued to maintain a strong momentum of rapid growth since last year, especially in Asia and the United States, and the European region has also overcome external environmental disadvantages to achieve growth.

In the announcement, LVMH pointed out that despite the poor economic environment, its business was extremely active at the beginning of the year, and achieved good results.

Bernard Arnault, President of LVMH, said that 2012 sales in the first quarter increased year by year, and better than the fourth quarter of last year.

French luxury goods maker Hermes announced recently that the company achieved sales of 814 million 500 thousand euros in the two quarter of this year and increased by 13.4% at fixed exchange rates.

The average forecast for the two quarter turnover of Hermes was 796 million euros, and it was clear that the final turnover was beyond the forecast.

The figures show that Hermes's growth in Asia is still strong, with an increase of 27%.

Judging from the type of business, the turnover of main products of Hermes has increased in the two quarter, of which the turnover of clothing and accessories business has increased by 22%, the business of watches and clocks has increased by 19.3%, and the silk and textile business has increased by 15.8%.

It is estimated that the daily operating profit margin of Hermes in fiscal year 2012 will be between 27.8% in 2010 and 31.3% in 2011, and the current average external profit margin is 30.3%.

With the global economic downturn, consumers' enthusiasm for buying is still strong as a strong pillar of the luxury market.

The cold wave seems to have little impact on luxury goods.

Rise or become a luxury sales tool

In April this year, LV completed the price rise again. This time the price adjustment area is the United States, the last time the price adjustment in France is only 3 months.

It is reported that some styles have changed greatly from 2010 to the present, and some of them are up to 27%.

Although the sale of luxury goods has not been hit by the financial crisis, many people are surprised at the fact that luxury goods have been rising sharply in the consumer downturn.

From the economic point of view, great changes have taken place in the international economic field. The economic situation in Europe is not optimistic. There are still many reports of the global financial crisis. In the context of inflation, no price increases mean depreciation.

At the same time, the raw materials of luxury goods are all very precious raw materials, and the raw materials in the international market are also generally rising in price. The rise in costs will surely enable businesses to raise sales prices.

Moreover, many brands have been thinking about the added value of products. For example, Chanel, Dior and other brands have made the fashion show very luxurious. The impression is that this brand is really luxurious and worth buying at a high price.

Generally speaking, the brand of price increase is a big brand with good overall sales performance in the world. They have established a good reputation and reputation among consumers. For their fixed consumers, the price increase will not strike their consumption enthusiasm to a great extent.

On the contrary, perhaps because of the increase in sales prices, they also enhance their brand value.

The purchasing power of Chinese consumers is increasing, and the purchase will never be soft because of rising prices, which will push luxury brands to raise prices.

The price rise of some brands has already made consumers very comfortable, and has not reduced the brand sales performance. This gives the luxury brand a positive signal, and continues to rise in price, so there is a collective price increase in the current brands that are confident in themselves.

Rising prices are also the top line of international competition for the right to speak.

But why are luxury brands so frequent in price adjustment? Insiders revealed that LVMH, a company in which LV is located, is a French listed company. As other listed companies need performance growth to drive stock performance, then the specific performance of LV brand is the annual price rise (occasionally downregulated).

On the one hand, in order to increase revenue, on the other hand, it gives consumers the impression that their products are selling well.

There is also a claim that luxury brands pay more attention to the purchasing power of Chinese consumers in overseas markets.

More than half of Chinese luxury goods spent over the past one or two years have been consumed overseas, according to a survey released by strategy consulting firms, a world-renowned strategy consulting firms.

The hottest consumption includes the global fashion capital of New York, Paris, Tokyo and Rome.

The report says China has surpassed Russia and Japan to become the world's largest consumer of luxury goods.

Strong market growth indicates that China's luxury market outlook is still improving in 2012.

A large number of data can prove Bain's findings.

The British fashion giant Burberry group lists the shopping habits of Chinese tourists as an important factor in promoting sales worldwide.

According to statistics, in Burberry's London store, Chinese consumption accounts for 1/3 of sales.

Many luxury brands also say that a large number of tourists from mainland China have promoted sales in Europe.

According to the Wall Street journal, over the years, the public has become accustomed to Western tourists going to China to bargain for clothes. Now Chinese tourists are shopping in Europe for the same reasons.

The new Western Areas Ltd has opened 600 retail outlets in Bond Street, Oxford street and Regent Street. In the west end, a high-end product retailer has opened a "luxury London in China" to attract more Chinese buyers to London. The company said it would cooperate with the tour guide to launch special shopping for Chinese tourists.

Although luxury brands are also benefiting from the special phenomenon of luxury consumption by Chinese tourists, they should also maximize products and services to ensure stable returns for others.

Luxury brands take the initiative to deal with unknown challenges

Although the development of luxury goods has not been greatly affected in the financial crisis, the major brands are still cautious in dealing with unforeseen challenges and have made corresponding adjustments.

Big brands such as Tiffany (Tiffany & Co) and Bvlgari (Bulgari) have considered reducing the number of new stores opened.

Meanwhile, Dior in France is considering closing some boutiques in small cities in the US.

"I am not sure that these" highlighting the market "have the ability to offset losses in other markets.

"Every region will be affected," said Bvlgari President Trapani.

He estimates that only 10% of Bvlgari's new stores will be opened as planned.

Layoffs are the most direct way to reduce spending. Chanel's French division has decided to lay off 200 people, accounting for 10% of its Chanel employees. The main target is some short-term contract workers, including some large shop employees.

Earlier, Chanel also cancelled the Mobile Art mobile art exhibition around the world.

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Reducing the promotion budget is also the main way for most brands to control costs at present. This is especially evident in the four fashion week of autumn and winter since the financial crisis.

The scale of the show has shrunk. It is said that the number of viewers of Marc Jacobs show has been reduced from 2000 to 700, while Vera Wang has cancelled the show directly, with only a small exhibition of more than 100 people in its flagship store.

Cutting the budget is on the one hand, and how to use the budget effectively is another aspect.

Jean-Jacques Picart, a consultant who advising LVMH, has told the media that the PR budget of many brands has been cut by 30 to 50%. He added: "we need the most effective budget, which is creative in all aspects of the company's operation, not just in design."

According to sources, LV saved 1 million 500 thousand euros by reducing the display of flowers in shops, while Gucci began to save employees from mobile phone fees.

However, most of the brands have no plans to delay opening stores.

Versace's CEO Giancarlo Di Risio predicts that China's business growth will still reach 8%, although it has dropped from earlier 11%, but it is still far from the recession. Moreover, China's business will probably surpass Japan and become Versace's largest market in Asia.

The company has plans to reinvest 45 million euros to open stores in Dubai, New Delhi and Shanghai.

In addition, Versace has launched a 06 year suspension of the second-line brand Versus, hoping to cover more young people's market.

Ken Kress, executive director of Zegna's Greater China region, takes into account the possibility of slowing business growth in the future. It will reduce orders to reduce inventories, while postponing recruitment and entry to some new cities.

However, the company will increase investment in emerging countries and cities and increase sales in existing markets.

Coach has also started the direct camp plan, and has recovered 10 shops in Hongkong and Macao from agent Junsi group, and has completed the paction of 17 shops in the mainland.

The company president Ian Bickley said: "in the next 5 years, we will open more than 50 stores. The goal is to become one of the three largest importers of packaging and accessories in mainland China's Hongkong and Macao markets. From the current sales volume of 5 million US dollars and the 3% market share to 2013, sales will exceed US $250 million and market share 10%."

Dior president and CEO Sidney Toledano plan to focus new stores on emerging markets in the Middle East, Russia and China, including shops in Macao and Shenyang.

Shops are mostly 500 to 1000 square meters of large shops, covering women's clothing, leather goods, jewelry,

And various accessories series.

In a word, in the future, luxury brands such as LV will face many challenges, whether in emerging markets or traditional markets. For example, how to better understand what products rich consumers want to buy to highlight their differences with other equally prosperous consumers, and how luxury brands highlight their uniqueness and popularity? Luxury brands must control this delicate balance and maintain their uniqueness in the economic crisis, which may be the perfect strategy.