PARIS • The move by luxury goods firm LVMH to tap hip new design talents, in a bid to reignite interest in its biggest brands, looks like it is paying off with its shares surging to record highs.
Sales beat analysts' estimates in the first quarter as fresh propositions like Christian Dior monogrammed low-top sneakers and US$1,200 (S$1,624) Louis Vuitton utility harnesses hit stores.
The key fashion and leather division - where good news often lifts shares across the fashion industry - posted a 15 per cent gain. The stock rose as much as 4 per cent in Paris on Wednesday.
The luxury industry is now in its third year of rapid growth as shoppers warm to the revamped offer and newfound digital savvy of brands like Kering SA's Gucci.
The growth has been driven by China, where booming sales of high-end fashion have resisted an economic slowdown that pinched revenues for some car manufacturers and Apple.
At Christian Dior, designer Kim Jones released buzzy new sneaker models and adapted the brand's famous Saddlebag line for men.
The company said fur-and-handbags label Fendi, shoemaker Berluti, which also changed its designer, and Loro Piana also boosted the fashion division's growth.
Recent gains in LVMH and Christian Dior shares have helped chairman Bernard Arnault eclipse investment guru Warren Buffett to become the world's third-richest person on a Bloomberg index with wealth of around US$88 billion.
Star designer Hedi Slimane, known for his turnaround of Kering's Saint Laurent, returned to LVMH last year to expand the Celine brand, with plans to add menswear, couture and perfume.
His new store concept and first collections, including a line of unisex suiting, were rolled out during the quarter.
Overall, LVMH's first-quarter sales rose 11 per cent to €12.5 billion (S$19 billion), the Paris-based company on Wednesday, beating analyst estimates.
The group - France's biggest company by market value - promised to "reinforce" its leadership position in luxury this year.
LVMH's watch and jewellery division was the slowest growing - a sign that high-end timepieces are still struggling to make a comeback in a smartphone-equipped world where brands also face mounting competition from online re-sellers.