Dangerous LV Leather Products Are Approaching Zero Price Growth, Losing Their Asian Market.

< p > although at the beginning of this year, Arnott realized the brand crisis of LV, and decided to suspend the opening of new stores and rebuild the image strategy of high-end brands. But LV seems to have some difficulties. LVMH released its first quarter earnings report and became the focus rapidly. Due to its poor performance, the capital market also responded to the green plate for several days. < /p >
< p > leather goods sector grew by 0.4%, the lowest since 2008, compared with Hermes 12.8%. Arnott warned that profits would not rise. < /p >
< p > although at the beginning of this year, Arnott realized the brand crisis of LV, and decided to suspend the opening of new stores and rebuild the image strategy of high-end brands. But LV seems to have some difficulties. LVMH released its first quarter earnings report and became the focus rapidly. Due to its poor performance, the capital market also responded to the green plate for several days. < /p >
< p > of course, the impact of external economic environment can not be ignored: China's first quarter GDP gross domestic product growth rate fell from 7.9% in the fourth quarter of last year to 7.7%, the US manufacturing data performance is not satisfactory, and the European economy continues to be weak, causing the entire luxury industry to "add frost to snow". < /p >
Less than P, Arnott, who is more worried about his worries and worries, is an old rival, Hermes. Almost at the same time, Hermes has also reported a first quarter earnings, up 12.8% over the same period, and the performance expected above the market seems to dwarf the French luxury giant. < /p >
< p > < strong > LV leather goods has been the lowest since the financial crisis. < /strong > /p >
< p > recently, LVMH group released its first quarter results in 2013: as of the end of March, the group's total sales reached 6 billion 900 million euros, a natural growth of 7% over the same period last year. In addition to the growth rate of DFS duty-free shops and Sephora cosmetics stores as high as 17%, the growth rate of other categories declined to varying degrees: the growth rate of alcohol was 7%, lower than the 9% of the previous quarter, and the brand perfume cosmetics increased by 5%, down from 9% in the previous quarter. < /p >
< p > the performance of jewelry and watch department was particularly weak, sales fell 1%, to 624 million euros, while the same period last year increased by 141%, far exceeding that of other sectors. < /p >
< p > but the largest hit group for LVMH is the fashion leather department which occupies half of the group. < /p >
< p > according to the quarterly report, the sales volume of the LVMH fashion leather Department increased by 0.4% in the first quarter to 2 billion 380 million euros, the lowest growth rate in the Department since the financial crisis in 2008. In the first quarter of last year, the Department's performance increased by 17% over the same period last year. < /p >
P LVMH CEO Jean-Jacques Guiony said at the group teleconference that the growth of the Louis Vuitton brand in the first quarter and the growth of the leather goods sector in the first quarter were "no substantial difference", but as always, they refused to disclose any sales data of the Louis Vuitton brand. < /p >
"P >" now the economic situation is not good, sales volume has indeed dropped, our bags were not introduced before, now we have to introduce to customers. In addition, the competition among other brands is also fierce. LV Louis Weedon, a salesperson in Shanghai, told financial weekly newspaper reporter. < /p >
< p > Jean-Jacques Guiony also warns investors that the profits of the group's fashion and leather goods sector can not be improved, because advertising and other expenses are still high when sales fall, followed by a continuous decline in share prices. < /p >
< p > and according to Mario Oatley, an analyst with market research firm Bernstein, luxury demand in Europe and China is still hard to improve in the second quarter. < /p >
< p > < strong > Hermes increased by 12.8% over the previous year, higher than expected < /strong > < /p >
< p > LVMH group was dwarfed when Hermes first reported its first quarter results in 2013. < /p >
< p > earnings show that Hermes income increased by 12.8% to 856 million 800 thousand euros over the same period in 2012, at a constant exchange rate, which is higher than the 11% expected by market participants. The company's retail channel sales increased by 13.6%, and wholesale channel sales increased by 9.9%. < /p >
< p > from all sales areas, the sale of Hermes in Asia (except the Japanese market) increased by 17%, mainly driven by the mainland, Macao and Taiwan, China. The sales in the Japanese market increased by 7% according to the constant exchange rate, but by the actual exchange rate, it dropped by 8% due to the depreciation of the Japanese yen. The sales growth in the Americas was 11%. Although compared with last year, the income base of this year was lower and the overall economic environment was not good, Hermes still had 12% sales growth in Europe. < /p >
< p > from the classification of products, except for leather goods, harness, watches and tableware, sales of all products of Hermes have achieved double-digit growth. Among them, garments and accessories grew by 18%, silk and < a target= "_blank" href= "http://www.91se91.com/" > textile > /a > products increased by 15%, perfume increased by 18%, jewelry and household goods increased by 49%. In the new renovation and expansion of Shanghai Hang Lung Plaza last year, a new home display area was opened in the lobby of the first floor, which shows the importance of this business. < /p >
< p > but overall, the performance in the first quarter was relatively slow compared with the brilliant performance of Hermes before. Overall sales have slowed compared with sales growth of 17.6% in the first quarter of 2012. In particular, the increase in Hermes leather and harness categories was 7%, even less than half of the 14.8% increase in the four quarter of 2012. In this regard, CEO PatrickThomas believes that the reason is that production efficiency is low in 1 and February this year, resulting in a shortage of supply. However, the watch business has fallen by 5% over the same period of the Chinese market. < /p >
Under the economic downturn, Hermes has implemented a steady contraction strategy in the world. Only 2 new stores have been opened in 2012, and the current business will be driven by mainly endogenous growth. Although Hermes has slowed down in the first quarter, it is still better than most luxury brands, and it can be expected later. In particular, the two new leather workshops opened last year will partly ease the situation that leather production has lagged behind demand. < /p >
< p > < strong > LV. The price strategy is not welcome. < /strong > /p >
< p > performance decline makes LV rush to adjust strategy. In addition to upgrading products and reshaping brand image, price rise seems to be a strategy for luxury brands, but LV's first price rise does not seem to please. < /p >
< p > according to the report issued by HSBC HSBC in March 26th, LVMH's brand Louis Vuitton has raised about 10% of the price of non leather goods such as Speedy and NeverFull in Europe, and the price increase in the United Kingdom and the United States is over 10%. At the same time, HSBC HSBC pointed out that similar products in the Asian market in mainland China, Hongkong, Taiwan and Singapore raised 5%-10%. In order to counter the weakness of the yen, the Louis Vuitton brand in February 15th has raised the highest unit price of the Japanese market by an average price of 12%. < /p >
< p > "now all the bags have gone up, and the price increase is about 5%." The salesperson of LV house in Hang Lung Plaza, Shanghai, said. < /p >
< p > walk into LV's "LV house" in Nanjing West Road, Shanghai, which is quite different from the LV store. The first floor hall displays many kinds of bags. Unlike the classic LV pattern of the flooded street, the flagship store's bags are brightly colored and fashionable compared with the previous ones. Only a few classic packages are displayed in the corner. < /p >
< p > especially worth mentioning is that in order to enhance the high-end image of the brand, a new a target= "_blank" href= "http://www.91se91.com/" leather "/a" bag area has been opened up in the conspicuous place on the first floor. The salesperson said that the bags here are all limited, and there are one or two in the country, most of them are crocodile skin, but customers can customize them. < /p >
< p > the brand new store image did not bring much popularity to the shops. In the 10 minutes or so of the reporter's observation, there were few customers in the shop, and there were far fewer salesmen. Jean-Jacques Guiony also admitted that the flow of people in most shopping centers in China has declined, which he attributed to the weakness of China's economy and the sequelae of leadership changes. < /p >
Jacques Guilloni, chief financial officer of P > LVMH, said that LVMH is losing its demand for its products in the Asian market. About half of the group's business is directly or indirectly related to the Asian market. The "indirect link" refers to the contribution of Chinese tourists to luxury goods abroad. It is understood that the LV increased the European price, the price difference from China decreased from an average of 45% to around 30%, and LV salesmen said that the future spreads would be even smaller. < /p >
< p > but this strategy seems unwise, because facts show that because of the European policy of raising prices, Paris and Milan will reduce the attractiveness of Asian tourists, ghione expects the Japanese tourists to buy overseas LVMH products overall by 40% in the first quarter of this year. < /p >
Chinese tourists who love to queue up for goods in front of luxury stores in the P seem to have been watered down, and enthusiasm for going abroad may suddenly drop. < /p >