LVMH predicts travel markets turnaround

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LVMH Moet Hennessy Louis Vuitton chief financial officer said the company is looking to a sharp turnaround in the travel-related sector of its markets during the final quarter of the year to ensure it meets financial target for 2002.

Group cfo Patrick Houel's remarks to the financial press followed LVMH's announcement of "better than expected" sales at DFS and sluggish first-quarter revenue growth for its Louis Vuitton brand last week (TRW 24/04/02).

"The Vuitton brand will automatically pick up when the tourist trade starts to recover toward the end of the year," Houel said.

Houel said there were signs that tourist traffic was beginning to return to luxury-goods markets and that things would gradually improve through the summer. But he said the company doesn't expect any major upturn until the final quarter of the year.

LVMH has forecast "a significant rebound" in operating profit after last year's 20% slide in response to the travel slowdown.

Houel said the company's strategic refocusing on core businesses and debt reduction has produced Eur700m ($614m) in deals so far this year. That figure includes about Eur150m ($132m) from the sale of its Pommery champagne brand to Vranken Monopole, announced last week.

"There will be more sales of this type, more holding divestments and more real-estate sales," Houel said.