* Shares rise across luxury sector
* Hermes sees 2009 sales at 2008 level, excl currency impact
* LVMH says January sales went well, no 2009 outlook
(Adds details from FD interview, updates shares)
By Astrid Wendlandt
PARIS, Feb 6 Europe's luxury industry drew some
comfort on Friday from Hermes' (HRMS.PA) relatively encouraging
2009 outlook, and a positive trading update from LVMH (LVMH.PA).
The news from the world's two biggest luxury groups by
market value lifted the whole sector, battered in recent weeks
by disappointing sales and growing evidence of restrained
spending even among the ultra-rich.
Fresh figures from the pair showed upmarket handbags, shoes
and other leather goods resisted consumer thriftiness better
than jewellery, watches and certain spirits.
Hermes said it aimed to keep 2009 sales relatively constant
against 2008. Many analysts expect the global luxury market to
fall about 10 percent this year.
LVMH said January "was not a bad month" but declined to give
any guidance for 2009.
Shares in Hermes rose as much as 8 percent, and were up 6.1
percent at 79.56 euros by 1308 GMT, valuing it at 8.4 billion
euros ($10.8 billion), making it the world No. 2 behind LVMH.
The French CAC 40 index .FCHI of blue-chip companies was
up 0.4 percent, while the DJ Stoxx Personal and Household Goods
index .SXQP was up 1.6 percent. The Dow Jones Retail index
.SXRP was 0.7 percent higher.
LMVH shares were 7.4 percent higher at 47.67 euros, giving
it a market capitalisation of 23.4 billion euros, while PPR
(PRTP.PA), owner of luxury group Gucci, also saw its shares rise
more than 6 percent.
The positive ripples reached Luxottica (LUX.MI), whose
shares were up more than 5 percent, even though the Italian
eyewear group cut its 2008 earnings forecast.
Hermes and Louis Vuitton have been shining partly thanks to
their trademark leather goods, but LVMH has been more exposed to
the poor state of the jewellery and watch markets than Hermes.
Leather goods sales at Louis Vuitton likely rose between 6
percent and 7 percent during the fourth quarter, based on
analyst estimates, while at Hermes they rose 8.7 percent.
Hermes said leather handbag sales jumped 14 percent during
"We have seen a slowdown since October but we are still
growing," Hermes Finance Director Mireille Maury told Reuters in
an interview on Friday.
Most luxury groups, except for Tod's (TOD.MI) and Burberry
(BRBY.L), have published disappointing sales figures for the
In January, Italian jeweller Bulgari BULG.MI and
Switzerland's Richemont CFR.VX warned of a difficult 2009 and
U.S. jeweller Tiffany issued its second profit warning in three
Hermes beat expectations with a 1.7 percent rise in sales at
constant currencies in the fourth quarter, while LVMH said its
quarterly sales were "about flat", without giving details.
"Fourth-quarter figures demonstrate that the resilience of
the Louis Vuitton brand cannot be ignored when assessing LVMH
investment risk versus other luxury companies, notably the watch
players," HSBC said in a note.
The wines and spirits unit at LVMH, which also owns Krug
champagne, Chopin vodka and Hennessy cognac, suffered
particularly in the United States and Japan.
After reaching a peak in the first half of 2007 of more than
20-times current year earnings, average valuations in the
European luxury sector have fallen to 2003 levels at about
9-times to 10-times this year's expected earnings.
LVMH is trading on about 11-times this year's earnings while
Hermes is still on about 30-times due to its resilient profile
and recurring takeover speculation.
Since Jan. 1, LVMH stock has fallen by 2 percent, Richemont
by 11 percent, PPR by 8 percent and Hermes by 20 percent, all
underperforming the DJ Stoxx Personal and Household Index, which
has itself gained 4.6 percent.
(Editing by Andrew Macdonald)