What encourage brands to raise their prices in euros

Luxury is in full euphoria, as confirmed by the publication yesterday of best quarterly sales expected by LVMH, the number one sector. In the third quarter, the Bernard Arnault Group (also owner of the "voices") saw turnover grow by 24 to EUR 5.1 billion. Organic growth stood at 14, as in the first half: fashion and leather goods, drawn by its flagship Louis Vuitton brand, retained a strong dynamic, while the wines and spirits are better than expected with the development of the cognac Hennessy in Asia. Optimism about the sequence of events, LVMH said yesterday that "its excellent performance since the beginning of the year reinforced his confidence for 2010."

Since January, industry groups are with a nice set flew on the stock exchange. Featured, Hermes with a leap of 90. LVMH, the world leader courses challenger Richemont (Cartier, Van Cleef & Arpels, Lancel...), PPR (Gucci, Balenciaga) and Swatch, they increased by 40 to 42. Yesterday, the world leader of luxury was still action win 0.54 after the publication of its turnover.

Another sign of the rally in the sector, Hugo Boss yesterday raised its annual targets for 2010. In the third quarter, its turnover emerged an increase of 19, to EUR 538 million, for an operating profit rose by 42 to EUR 150 million.

This high acceleration of the application has enabled marks to initiate a movement of prices, particularly in Europe. Louis Vuitton, which rates remained stable during the crisis, is thereby increase up to 9 in the euro area. This increase mainly relates to articles of leather goods, and in particular his famous Monogram bags. Chanel also made an "adjustment" of 20. But this increase is only a single model, the classic bag, and "some markets like Europe and Asia", said a spokesman. Hermes has increased its rates, at the beginning of the year, "a usual progression", the amount is not specified by the House, which indicates "that no other interfere by the end of the year".

"Christmas time before."

To justify this increase, the claws are first the cost of raw materials. "The leather jumped 60 and that of palladium, used to the metal parts of bags, 100 ", it indicates at Vuitton. An argument placed by some scholars, who argue that the weight of raw materials in the cost of the bags in canvas coated with Vuitton, for example, does not exceed 10. It is, while the rate of gross margin of the brand reach, he 80.

In fact, it is not the only reason. As indicated by Chanel, "this significant increase of the costs of high-quality leather is combined with effects of change." "What has led us to increase the price of this iconic bag that bears the brand values, in the same way as the Chanel jacket."

In fact, the differential between the various currencies and the euro is dug. In a year, between the third quarters of 2009 and 2010, the rise of the yen against the euro has reached 17. The real Brazilian has appreciated by 15, 14 rupee, the yuan by 11. "Demand for luxury goods has been boosted in Europe by very sensitive to monetary parities tourism customer flows." Their purchases have been added to local demand, said Emmanuel the Varannes Bruley, analyst for Société Générale. Prices for these tourists may vary from 35 to 50 from their domestic market. It's Christmas time before! . This differential has even reached 70 in recent weeks between the Japan and Europe. With the risk of a market of resale parallel of luxury items, said market grey, in different countries. What encourage brands to raise their prices in euros. "The imbalance in the structure of prices cannot explain everything."Dollar compared to the euro has also recently moved far less favourably, believes his side Melanie Flouquet, analysts at JP Morgan. "The rise in the price is also related to the strong demand." A movement which is expected to continue, as well as left to hear the release of LVMH.

The spectacular rebound of the purchasing caused difficulties in production at Vuitton, then that all of the groups had lifted the foot on the investment crisis. At the time, the House was to close an hour earlier its stores in France since mid-September, "for fear of being out of stock before Christmas." En route to his new Studio in the Drôme, with 250 employees, is expected in 2011. The twelfth workshop in France will increase 10 capacity of the mark. LVMH said yesterday that he was looking for new settlements in the South of the France.