World Cup slows growth at LVMH

FRANCE'S Louis Vuitton Moet Hennessy posted a lower-than-expected rise in first-half turnover, sending a chill throughout the luxury goods sector which now takes in Britain's recently floated Burberry Group.

Sales to 30 June rose by just 2% to e5.8bn (£3.7bn) from e5.7bn a year ago. According to a Reuters poll, analysts had forecast turnover of e6bn, but the triple effects of the World Cup, a slowdown in travel and adverse currency movements hit harder than expected.

LVMH, which owns Givenchy, Christian Dior and Moet & Chandon, put a positive spin on the results saying they had gained market share and 'should be compared with a strong performance in the first half of 2001' when sales had grown by 13%.

It expects operating profit for the six months to show growth of 15% and predicts a 'significant rebound of results expected for the end of 2002'.

LVMH said all its major brands had achieved sales growth 'at constant exchange rates' despite the ongoing weakness of tourism, but 'buying trends of domestic Japanese and Korean clients were negatively impacted by the short-term effects of the World Cup'.

Shares in Burberry were today stuck at 226p, below last week's float price of 230p.