The Straits Times
Published on Feb 01, 2013

Louis Vuitton slows down expansion to protect image


PARIS (REUTERS) - Louis Vuitton, the world's biggest luxury brand in terms of sales, is planning to dampen its expansion worldwide and focus on high-end products to preserve its exclusive image, said Mr Bernard Arnault, chief executive of parent LVMH.

Mr Arnault said publicly for the first time that the brand's wide footprint risked making it too commonplace, and analysts said the decision explained the recent drop in sales growth at Louis Vuitton in recent quarters.

Louis Vuitton, which generates more than half of LVMH's operating profit, has been opening shops in the past decade in places as remote as Mongolia. It is now in 50 countries with more than 460 shops and generates more than 7 billion euros (S$12 billion) in annual sales.

"The group's strategy now is to limit store openings," Mr Arnault said at the group's annual results presentation. "We want to focus on leather products with high value added."