The luxury-goods industry is stuck in a slump.LVMH Moet Hennessy Louis Vuitton, the world's largest luxury-goods company, on Monday said its third-quarter sales slipped 0.6%, hindered by the consumer-spending implosion and retailers working down inventories without ordering new merchandise.
The luxury-goods industry likely won't fully recover from the downturn until 2011 or 2012, consulting firm Bain & Co. said in a forecast released Monday. This year's decline in sales of luxury goods, including apparel, jewelry and fashion accessories, will be steep, off 8% to about $227 billion, Bain predicts.
LVMH, a bellwether for the luxury-goods industry, declined to give a full-year profit forecast even though all of its divisions performed better than in the first half. Steep declines in LVMH's champagne and watches businesses brought sales down to €4.14 billion ($6.17 billion), off from €4.16 billion last year.
"I don't think we can say the crisis is over, but we can start to see the light at the end of the tunnel, even though the light is far away," said LVMH Chief Financial Officer Jean-Jacques Guiony.
Claudia D'Arpizio, a Bain retail consultant based in Milan, said she expects the industry's heavyweights—a group that's generally defined to include companies like LVMH, Cartier owner Compagnie Financiere Richemont, and Gucci Group, part of France's PPR SA—to hold up better than smaller players. Mr. Guiony said LVMH aims to increase its market share this year, spread out over categories from cognac to perfume, bags and jewelry.
