Dior slips as luxury fashion feels cold wind

Christian Dior reported a 9.5-% fall in net profit to €796 million ($1.026 billion) and a slight rise in current operating profit to €3.621 billion.

Christian Dior is the holding group that controls the French luxury products giant LVMH, with interests from champagne to luggage, and of the Christian Dior Couture fashion label.

The holding Dior group said on Monday that its sales rose by 4.0% to €17.9 billion last year and by 3.0% in the fourth quarter to €5.4 billion.

But at CM-CIC Securities, analyst Emmanuelle Thollon Pommerol said the main point was that "Dior Couture is disappointing in every way."

The group said that Dior Couture "activity remained firm in Europe, the Middle East and China but the economic crisis weighed on the trend of sales in the United States and in Japan."

Operating profit had slumped by 88% to nine million euros, partly because of costs in streamlining the global supply chain.

Thollon Pommerol commented that Dior Couture, by moving up market, had pulled sales and profits down.

The Moet Hennessy Louis Vuitton unit (LVMH) reported on Thursday that earnings in 2008 reached more than 2.0 billion euros, narrowly exceeding the previous year's record, but said sales had slowed sharply.

They had weakened particularly towards the end of the year, the group said, echoing the findings of many companies in various sectors reporting a sharp downturn in the last quarter.

But LVMH declined to set targets for performance this year because of the highly uncertain climate of crisis in the global economy, and Dior Couture was also cautious on Monday about prospects this year.

Christian Dior stock was showing a fall of 2.04% to €43.88 although the overall market as measured by the CAC 40 index was ahead by 0.04%.

Source: AFP

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