Profits at the top luxury-goods corporations soared for the first half of the year, showing that people are shopping and indulging in fine apparel again. LVMH's profits increased 52.8 percent for the first half. Second-quarter sales at Hermès and Burberry both increased 27 percent. PPR just announced its numbers for the first half of the year, and like rival LVMH, they're pretty good! Profits spiked 87 percent for the first six months of 2010 thanks to demand for fancy clothes and accessories in Asia.
The first-half results were a “blowout,” Simon Irwin, an analyst at Liberum Capital in London, wrote today in a note. Irwin recommends buying the stock.
And he wasn't the only one. But the sartorial needs of this country don't matter quite as much to companies like PPR as those of Asia, where discretionary spending is increasing. Karl Lagerfeld already did a China-inspired collection, but we shall see if the focus on the continent visibly influences other collections for the scarily imminent spring shows.