World's Leaders in Luxury

In 2008, worldwide sales of luxury is between 220 and 230 billion dollars, according to the definition and scope included.

France is the world leader in luxury with a third of the production recorded.

Alone, the 75 luxury houses of the Colbert Committee hold a quarter of the global luxury goods market. The market share of France is 34% against 20% for Italy, 14% for the United States and 6% for Switzerland. In 2007, Colbert Committee members represent a turnover of 28.4 billion dollars, a turnover of 39 billion dollars and 115,000 employees in France.

They weigh almost as much as the French car industry in the world, 10 times more than rail. They carry 82% of their turnover abroad.

On the global luxury market, according to a study Xerfi (2006 data), clothing leads with 32% of the total market value, followed by perfumes and cosmetics at 24%, shoes and bags with 21%, jewelry and jewelry at 20% and finally, the arts of the table with 3%. AT Kearney, meanwhile, lists in 2005, 270 luxury brands which 130 were French, 42 Italian, 29 American, 19 Swiss and 54 are from various countries.

Since the 1990s, there is a concentration in the luxury sector.

French luxury is controlled today by very large groups: LVMH, PPR and Richemont.

Iconic brands of the “French luxury” are owned by foreign groups: Chanel by the Swiss group PAMERCO, Nina Ricci and Paco Rabanne by Spanish PUIG, Christian Lacroix by the American FALIC, Lanvin by the Luxembourg HARMONY.

A French medium DESIGNERS ALLIANCE, a subsidiary of DUMENIL else has about 10 brands in fashion, leather goods and jewelry including Scherrer, Féraud, Jacques Fath, Francesco Smalto.

World’s No. 1 luxury LVMH (Moet Hennessy Louis Vuitton)

LVMH was created in 1987 by the merger of Louis Vuitton and Moet Hennessy. The Group has, according to Diane (October 2008), 50 539 shareholders and subsidiaries in France and abroad.

At June 30, 2008, sales reached 7,799 million euros against 7412 to June 30, 2007 and 6968 to 30 June 2006.

LVMH has achieved a growth (in structure and constant exchange rates) of 12% of its sales to 7.8 billion
euros and an operating income at current exchange rates up 19%. The division’s most dynamic Group is the fashion and leather goods. It is up 14% and operating income grew 5%. Louis Vuitton recorded another double-digit growth and an exceptional level of profitability.

The geographical distribution of sales of the Group at 30 June 2008 is as follows: France 14%, Europe (excluding
France) 22% USA 23% Japan 11%, Asia (excluding Japan) 21%, 9% other markets.

Source: LVMH, semi-annual report to June 30, 2008

The number of stores in the Group at 30 June 2008, in 2150 the world was 308 in France, 545 in Europe (excluding France), 490 U.S., 256 in Japan, 446 in Asia (excluding Japan), 105 for other markets.

Number 2 in the world of luxury: the Swiss Richemont

The Swiss group was established in 1988. Its activities are divided into five divisions and 17 brands. The sales by division,
published in the fiscal year ended March 31, 2008, are:

Houses of fine jewelry: Cartier and Van Cleef & Arpels: 50% of sales, or 2 657 million euro turnover.

Specialists watch: Piaget, A. Lange & Söhne, Jaeger – LeCoultre, Vacheron Constantin, Officine Panerai,
IWC, Baume & Mercier: 26% of revenue, or 1 378 million.

Houses of writing instruments: Montblanc and Montegrappa: 12% of sales, or 637 million euros,

Leathers and accessories: Alfred Dunhill, Lancel: 6% of sales in 2008, 309 million euros,

Other: Chloe (fashion), Azzedine Alaia (mode) joined in October 2007 Richemont, Purdey (rifles, fashion and
accessories): 321 million euro turnover.

Shanghai Tang, the only Chinese luxury brand globally located, is 100% owned by Richemont. Shanghai Tang has about forty stores worldwide including twelve in mainland China, a market that, with the United States, is his primary target. The brand is also present in London, Dubai, Madrid and Paris in the premises of the House of China, rue Bonaparte. The creation is provided by Joseph Li, a cosmopolitan studio responsible for women’s fashion,.

Number 3 in the world of luxury: PPR

PPR is built around the Fnac, Redcats Group, Conforama, CFAO, Puma and Gucci Group.

The Group occupies a leading position in markets exclusive luxury and more open markets of the general public. Markets exclusive luxury, PPR generated 3.867 billion euros in sales in 2007, with 14,095 employees and 494 directly-operated stores.

In the first half of 2008, PPR generated sales of 9,584 million euros, up 12% in real and 5% on a comparable basis to a
first half of 2007.

Number 4, Hermès International

Hermes opened in 2006, a five-story house in Seoul. It rises above the museum, futuristic forest of trees to bark leather Vibrato, such as “if it had its roots.” Inside the trunk, in glass cases, jewel cases, objects, photographs and films depict the life of the saddle. The house also has a cafe reading a library, two floors to the store and a third exhibition space.

Hermes, one of the last family group, was founded in 1837. The company started by harness and saddlery initially, and diversified subsequently in the luggage, leather goods, sewing, jewelry, silverware and tableware.

Nearly three-quarters of the capital is held by the family: Dumas, Puech and Guerrand. At the General Members Meeting in June 2008, it said it wanted to retain control of the group. The appointment to the board of management, six family members, from the sixth generation, is a sign of strong commitment of the family.

In 2007, the Group achieved a turnover of 1,625 million euros and employed 7,455 people which 4741 are in France. The number of own stores is 156, the number of dealers 111. Thirteen branches have been renovated. A new store was opened on Wall Street in New York in 2007. The distribution network now has a new branch in India in New Delhi.

The breakdown of sales by geographic area is 20% for France, 21% for Europe (excluding France), DE24% for Japan, 17% for the Asia-Pacific (excluding Japan), 15% for Americas and 3% for others.

At the end of September 2008, the Group turnover reached 1.2236 billion euros. Sales growth is 14.2% at constant exchange rates and due to exchange rate impact of +9.7% at current rates.

In Europe (including France), sales increased by 10%. In the Americas, the increase is 22%, Asia ex Japan 21%, thanks to strong growth in China, where the distribution network has expanded to three new branches. In Japan, the context is difficult, sales amounted to only 2%. In late 2008, Hermes plans to expand its distribution network with the opening and renovation of 7 branches which open a new store in the U.S. in San Diego and several projects in Asia.

Number 5, PAMERCO (Chanel)

Pamerco AG is a Swiss holding company with operations in France through its participation as the sole shareholder of the
Chanel House, which specializes in haute couture, perfumes (famous No. 5) and cosmetics, fashion design and jewelry.

Chanel SAS (privately held family company) owns16 branches, including Bourjois, manufacture and distribution of cosmetics and perfumes (Chanel participation: 100%), eras (development and sale of swimwear and PAP Women, revenues of 27 million euros in 2007), Goossens Paris (jewelry, Revenues 2007: 4.7 million euros), Holland & Holland, Biolandes Technology …

Chanel SAS conducted in 2007 a turnover of 2.155 billion euros, a profit of 132, 5 million euros according to Diane.

The gross revenues of Chanel have been going up for the past nine years with a revenues in 1993 to 567 million euros compared to a revenue of 1.2 billion euros in 2005. The number of employees worldwide is estimated at 16,000.

Feature of CHANEL: an aura of mystery maintained by its owners Alain and Gerard Wertheimer.

Right now, Chanel is studying a make up of its global organization, following the retirement of a generation of leaders and the death of its art director, Jacques Helleu, historical pillar who entered the house 50 years ago.

In 2008, the group was transferred to the United States while the collections are designed by fashion designer in France
Karl Lagerfeld, creative director at Chanel since 1983. In January 2007, Maureen Chiquet, so far at the head of the U.S. subsidiary, was named president of the global brand.