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Luxury stores caught out by surging demand

Outside Louis Vuitton’s flagship emporium on Paris’s Champs-Elysées Angelia, a financial controller from Malaysia, says the €920 ($1,260) bag she has just bought is her second choice.

“The monogram bag I wanted was out of stock – we tried three Vuitton stores and none of them had it. So I’ve settled for a different size,” she says.

For the past two weeks, the shop, where tourists queue to enter, has been shutting an hour earlier than usual. Along with Vuitton’s other standalone Paris stores, the shop is trying to sell fewer products and preserve stock for Christmas.

It is not the only luxury goods company to have been caught unawares by the strength of demand after last year’s slump.

Chanel has pushed up the price of its classic quilted leather bags by 20 per cent, citing rising leather costs, while Salvatore Ferragamo the Italian shoemaker, says sales have risen by 20 per cent since June.

At the Paris motor show, all five Bugatti World Record cars, with a top speed of 415km per hour and a price tag of €1.95m ($2.67m) have sold out. Ferrari has also sold its 80 limited edition SA Aperta, costing €400,000.

Luca Cordero di Montezemolo, Ferrari chairman, said at the motor show that the carmaker could end the year with close to record profit.

Vuitton’s supply problems are surprising, given that the company – part of LVMH, the luxury goods group – prides itself on an efficient and automated supply chain to shops whose stock it controls, since it does not sell to third-party retailers.

As Yves Carcelle, head of Louis Vuitton told the Financial Times in May: “We are the only luxury brand that controls completely our distribution. So our distribution is the most exclusive in the industry.”

But having slackened production last year, it will be unable fully to meet the surge in demand until a new factory – its 12th in France – opens next year.

Antoine Belge, analyst at HSBC, does not expect the early closures to have a noticeable impact on sales. Only three stores are affected out of more than 400 worldwide and normal opening hours are set to resume next month.

But he does not believe that Vuitton, which drives profitability at Paris-based LVMH, the world’s largest luxury goods group by sales, can continue growing at recent rates. The group does not disclose Vuitton sales figures, but the fashion and leather goods division, of which it is the biggest part, grew by 18 per cent in the three months to June. Mr Belge estimates that Vuitton sales were up 20 per cent organically – double Vuitton’s 10 per cent informal annual target.

 “Clearly the 20 per cent has to slow – it’s untenable,” he says. “There’s a limit to the speed at which they can train people and open factories; it’s a nice problem to have.” This raises again the issue of LVMH’s dependence on Vuitton.

 LMH has an enviable collection of brands, including Kenzo, Donna Karan and Marc Jacobs, in fashion; Christian Dior and Givenchy in perfumes; TAG Heuer, Chaumet and Hublot in watches and jewellery; and Dom Pérignon and Château d’Yquem in wines and spirits.

But it relies on Vuitton for most of its profits. Analysts estimate that Vuitton accounted for more than half LVMH group sales of €17.1bn last year and 60 per cent of operating profits.

The business has the highest returns in the industry, according to analysts, helped by operating profit margins estimated by JPMorgan analysts at 44 per cent. Its rapid growth rates have been helped by an early move into China, which is now one of its key markets.

“LVMH is indeed dependent on Louis Vuitton,” says Luca Solca, analyst at Bernstein Research. “There are two major legs in LVMH – Vuitton and wines and spirits. LVMH does have a long tail of underperforming brands and, if it divests them, it will become a better company.”

There are no signs that LVMH aims to reduce its dependence on Vuitton, at least in the short term.

Meanwhile, Jeff, a student from California, explains why he is happy to queue in the Champs-Elysées: “I’m looking for a wallet – they are about $50-$60 cheaper here than back home.”



France Faces European Action After Expulsions

After an acrimonious dispute over its expulsions of Roma, France was told on Wednesday that it would face legal proceedings for failing to meet minimum European Union safeguards to protect the rights of the bloc’s citizens.

 The decision followed a fierce clash between the European Commission, the bloc’s executive body, and President Nicolas Sarkozy of France that overshadowed a meeting of European Union leaders this month.

 Wednesday’s action is less than the European commissioner for justice, Viviane Reding, promised a little more than two weeks ago, when officials also considered taking France to court over the more serious charge of discrimination. But she did single out the government in Paris for legal action.

 Heather Grabbe, director of the Open Society Institute in Brussels, said: “They are on more solid ground doing it this way, but it doesn’t send a signal about discrimination. I applaud it if it is effective, but they need to follow through on rooting out discrimination.”

The dispute over the Roma, also known as Gypsies, has brought relations between the French government and the European Commission to a low point. One of the jobs of the bloc’s executive body is to be the guardian of European Union law.

But on Wednesday the commission decided against immediately beginning a discrimination case, sending Paris a series of questions instead.

On Wednesday, the French Foreign Ministry highlighted the fact that the legal measures were restricted to the state of its law, rather than directly criticizing measures taken by the French government.

“If it’s legitimate for the commission to question one or other member states on the application of community law, the real question is one of better integration of the Roma in the countries of which they are citizens,” it said in a statement.

Under European Union procedures, France will be given the chance to reply to the commission and, if it fails to satisfy the authorities in Brussels, could be taken to the European Court of Justice. That court could force the French to bring their laws into line with European Union rules or face fines.

France has sent thousands of Roma back to Romania and Bulgaria this year, destroying illegal camps where they were living on the outskirts of French cities.

The rift between Paris and Brussels emerged when Ms. Reding discovered that assurances from French ministers about their policies on Roma were contradicted by an official document that was leaked.

That document — which has since been withdrawn — showed that Roma had been specifically singled out by the French government.

In an unusually blunt comment, Ms. Reding referred to “a situation that I had thought that Europe would not have to witness again after the Second World War.”

In Brussels, some officials argue that there is little point in pursuing France over the discrimination issue because it has already withdrawn the document. Others say that, were a case taken to the European Court, it could open up the opportunity for civil cases in France by Roma whose rights were breached.

While the dispute has raised the plight of Roma as a political issue, groups campaigning for their rights say much more needs to be done.

Ms. Grabbe called on the European Commission to examine the behavior of other nations, including Italy. “They need to send a signal that this is not acceptable behavior in Europe.”

In a report published Tuesday, Amnesty international argued that European countries, including Germany, had been forcibly returning Roma to Kosovo and called for a halt to the practice. A different set of obligations applies to citizens from Kosovo because the country is not a member of the European Union and therefore they do not have the right to move freely through the bloc.

But Sian Jones of Amnesty International asserted that European Union countries risked breaking international law by sending Roma back “to places where they are at risk of persecution, or other serious harm.”



La pauvreté s’est-elle vraiment stabilisée en France ?

Selon l’enquête 2008 de l’Insee, 13% de la population vit sous le seuil de pauvreté, un taux quasi identique depuis la fin des années 1990. Les associations s’alarment pourtant d’une dégradation des conditions de vie pour de nombreux ménages. Décryptage.

7,836 millions de personnes vivaient en 2008 avec moins de 950 euros par mois, contre 8,035 millions en 2007. C’est ce que révèle le rapport “Revenus fiscaux et sociaux” publié ce mardi. Ses auteurs estiment que 13% de la population française vit en dessous du seuil de pauvreté, un chiffre quasi stable par rapport à 2007. La moitié d’entre eux vivent avec moins de 773 euros mensuels.

Qui est considéré comme pauvre en France ?

Toutes les personnes dont le niveau de vie est inférieur à 950 euros par mois, soit 60% du salaire médian dans l’Hexagone. La France comme l’Europe optent pour un seuil de pauvreté relatif, et non absolu comme les pays en voie de développement. Ces derniers s’appuient sur les dépenses minimales nécessaires à un niveau de vie décent. Mais dans les pays développés, avec un seuil relatif, la définition de la pauvreté évolue suivant les époques.

L’augmentation du salaire médian fait mécaniquement augmenter la pauvreté, celle du seuil aussi. En 2008, la France a décidé de fixer son seuil à 60% du salaire médian, et non plus 50%, pour s’aligner sur les critères européens. Avec pour effet de diluer les chiffres de l’extrême pauvreté. “Comme les mesures actuelles de lutte contre la pauvreté, dont le RSA, n’auront aucun impact sur les très pauvres, on préfère mettre en avant le taux de 60%”, explique Alain Leroux, économiste spécialiste de la pauvreté. Si l’on garde le taux de 50% du  salaire médian, plus de 4 millions de personnes étaient toujours considérés comme pauvres en 2008.

Comment l’Insee évalue t-elle le niveau de vie ?

En s’intéressant au revenu disponible des ménages, c’est à dire à tous les revenus après impôts et prestations sociales. Ce chiffre est ensuite divisé par le nombre des unités de consommation qui composent le foyer : puisque vivre en commun permet de faire des économies, on considère que le premier adulte représente 1 unité de consommation, les autres personnes de plus de 14 ans, 0,5 et les enfants 0,3.

A partir de ce calcul, la France s’en sort mieux que ses voisins puisque 17% de la population des pays de l’Union européenne vivent sous le seuil de pauvreté selon Eurostat : la France se situe en dessous de la Belgique (15%), de la Finlande (14%) et de l’Italie (19%), et son taux de pauvreté dépasse légèrement celui de la Suède, à 12%.

Qui sont les plus touchés ?

Les familles monoparentales. Dans ces foyers où un seul revenu doit faire vivre un ou plusieurs enfants, la proportion de pauvres est 2,3 fois plus forte que pour le reste de la population. En tout 30% des familles monoparentales sont pauvres, souvent des mères qui élèvent seules leurs enfants.

Mais l’étude de l’Insee ne prend pas en compte l’âge des personnes. Or les associations dénoncent régulièrement la précarisation grandissante des retraités. Le collectif Alerte s’alarmait en avril de la hausse du nombre de personnes âgées venant demander aide et nourriture dans ses permanences. Près d’un million de personnes de plus de 65 ans vivraient sous le seuil de pauvreté, notamment les 600 000 personnes qui touchent le minimum vieillesse, 700 euros maximum par mois. 15,1% des femmes de plus de 75 ans vivaient avec moins de 950 euros en 2008, contre 13,4% l’année d’avant.

La pauvreté s’est-elle vraiment stabilisée?

Selon l’Insee, la proportion de personnes vivant sous le seuil de pauvreté s’est stabilisée depuis plusieurs années aux alentours de 13%, après une diminution entre 1996 et 2008. Pas de quoi se féliciter, estime Alain Leroux. “La lutte contre la pauvreté est bloquée. Il y a une inertie désespérante et la situation ne risque pas de s’améliorer pour les chiffres de 2009″, commente t-il.

Pour Christophe Deltombe, président d’Emmaüs France, les chiffres de l’Insee ont surtout pour défaut d’occulter la baisse du pouvoir d’achat. “Je constate plutôt une vraie dégradation de la pauvreté en France, notamment si l’on prend en compte le prix des loyers qui a flambé ces dernières années”, observe t-il. Pour lui, le revenu est un critère insuffisant pour apprécier la pauvreté : “Pour une approche sérieuse, il faudrait une dizaine d’indicateurs, parmi lesquels le pouvoir d’achat, le logement, les modes de vie, etc.”. Les chiffres publiés mardi par l’Insee portent de plus sur 2008 et n’intègrent pas “l’effet crise”. “J’ai bien peur que les chiffres pour 2010 soient beaucoup plus mauvais”, poursuit Christophe Deltombe.

Un sondage Ipsos révélait d’ailleurs la semaine dernière que les Français se considèrent pauvres avec un revenu net inférieur à 1003 euros par mois. Interrogés sur leur situation personnelle, 53% des sondés disent avoir été proches de connaître la pauvreté. Parmi eux, 33% affirment l’avoir affrontée et 20% seulement ne pas l’avoir connue.




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