The consequences of the events of Sept. 11 continue to have a serious impact on the global luxury goods market,” according to LVMH, the international luxury goods marketer. The Paris-based conglomerate reported on Nov. 12 that group sales for October tallied 1.113 billion Euros (about US$981.4 million), a decrease of 5% compared to the previous year.
“Signs of improvement are gradually appearing in some European countries, in Asia and in Japan, at the local client level,” says the LVMH report. “Nevertheless, the sharp reduction in travel became even clearer in October and had a considerable effect on sales to tourists in most countries.”
Because of this “negative trend,” LVMH now expects a reduction in annual operating profit-compared to 2000-of 10% to 15%.
To deal with this “difficult . short-term” situation, LVMH says it is focusing on “strengthening its prestigious brands and accelerating initiatives to reduce structural costs and improve profitability.”