Jul 12, 2008
Bear market
In the middle of 'Bear Market', the luxury industry fails to confirm its brilliance, despite a status experienced defensive sector. The number of billionaires in the world has yet flew in the space of one year, from 946 in 2007 to 1 125 in 2008. This trend has not prevented gold on Thursday the title of PPR heavily unscrew the Paris Bourse.
The group Pinault family showed a fall of 7.85%, bringing its decline to the dizzying figure of 45% since 1 January. The case of PPR, however, is one of being isolated. Other big name luxury goods, LVMH lost 24% since the beginning of the year ... french groups are not the only ones to waver. The Italian Bulgari fell by 38% and the Swiss Richemont 29% ...
use link for apply
http://www.incentaclick.com/nclick.php?id=5318&cid=4336
Pessimism on European luxury sector
The growth of European luxury should also slow in 2009, according to a research note from Deutsche Bank, which said no longer recommend to Buy no value in the sector, after having degraded Swatch and Luxottica to Neutral.
Pessimists, the office of analysts expects a slowdown in demand next year in luxury, with organic sales growth of 6% against a previous estimate of 7.7% and a forecast of 7.1% for 2008 . Faced with this regime down, Deutsche Bank was led to reduce its average target of earnings per share of 8% for European companies of the luxury industry.
PPR has not escaped the environmental concerns. Analysts at Goldman Sachs in particular have indicated that they questioned the tendency of luxury division, which is an essential component of the results of the group.
The performance of the Gucci brand, a subsidiary of PPR, include in the eye of the hurricane. Its results have under-performed other luxury brands in the first quarter of 2008, with growth of only 2%.
Affected by the financial crisis, the luxury industry is now subject to stock market investors' doubts about the dynamism of economic growth in emerging countries, including China, a country very fond of high-end products. Some market professionals believe that the decline of 12% of the Chinese trade surplus in the first six months of 2008 would be the first sign of a forthcoming slowdown in the growth of the Empire of the environment. A bad omen.
The syndrome Carrefour gains distribution
More concretely and beyond its luxury, PPR could suffer access weakness of household consumption in Europe and particularly in France. Its distribution activities general public would be strained.
The alarm bell was fired yesterday by Carrefour. The giant supermarkets grew its sales by 6% to 23.7 billion euros and 6.7% at constant exchange rates, a level lower than the forecasts of analysts who tablaient globally on up 7%.
But the black spot is undoubtedly the 4.8% decline in sales of Carrefour hypermarkets in France. Analysts at Credit Suisse n'anticipaient a -1.9% decline in sales of Carrefour in France and those of Royal Bank of Scotland a small increase of 1.8%. This performance against a cast suspicion on the whole distribution sector in France.
Rest before throwing shame on the whole distribution, it is noteworthy that Casino on Friday unveiled sales good bill. The consolidated turnover of the distributor has increased by 14.6% in 2nd quarter, with organic growth of 6.3%, driven by the performance of its brands Franprix and Leader Price.
But most importantly, Casino shows have done in France organic growth of its sales by 4.2% in the quarter. The setbacks Carrefour could be partly reflects the strategy of the giant french of large retailers that did not quite pressed formats proximity and the discount ... did not put enough ' Emphasis on own brands and, more generally, has abandoned an aggressive pricing policy that has made its success in the past.
Pending the July 23
The collapse of morale french households, however, is a reality. The summary indicator of opinion households has dropped four points to -46 in June 2008, according to the latest monthly survey by INSEE.
In this context, Goldman Sachs expects additional bad news for PPR on the last six months of 2008 and 2009. The analyst expects the pole luxury and distribution activities are affected.
The publication of turnover in the second quarter of PPR July 23 will be closely monitored.
The office of JP Morgan analysts said this week (to ensure turnover of Carrefour) that anticipated sales of 4.6 billion euros, up 2.3% over a year and 4 % Perimeter and constant exchange rates, 10 basis points below the first quarter.
Copyright (c) 2008 CercleFinance.com. All rights reserved.
The information and analyses disseminated by Reuters does not constitute a decision support for investors. The responsibility of Reuters can not be accepted directly or indirectly resulting from the use of information and analysis by readers. It is recommended that anyone not warned to consult a professional adviser before investing. This information indicative are in no way an incitement to sell or a solicitation to buy.
by erectusplus at 11:00 PM |
0 Comments:
Post a Comment
<< Home