Luxury spending 'set to double'

Shirts are displayed at the Ermenegildo Zegna Global Store in Milan, Italy. Giuseppe Aresu/Bloomberg News

Spending will climb to 300 billion euros, Arnault said in a speech yesterday at an industry conference in Moscow.

Purchases of luxury items will climb because more shoppers in Russia, China and India will be able to afford expensive handbags, perfumes and champagne, the CEO said, calling those countries a "major opportunity" for luxury producers. China is already the world's third-largest luxury market, followed by Russia, according to Arnault, who cited analyst research.

"The creation of new wealth, readiness to spend by consumers and continued development of new consumers and new markets" will drive growth, he said.

LVMH, whose products range from Marc Jacobs fashions to Veuve Clicquot champagne, opened its first Christian Dior store in Russia in the 1980s off of Moscow's Red Square. The Paris-based company entered China in 1992, Arnault said.

Luxury spending also will increase in the United States, which still has "untapped potential", according to the executive.

The US accounts for 16 percent of world luxury sales, about half of the Japanese share of 31 percent, Arnault said.

Arnault, France's richest man, expressed concern about "floundering" world trade talks and called on other luxury companies to promote open markets.

Bloomberg News

(China Daily 11/29/2007 page16)