By Nadya Masidlover
PARIS--LVMH Moët Hennessy Louis Vuitton SA (MC.FR) said Tuesday
that it has no plans to harmonize global prices on its luxury
goods, damping speculation that the luxury juggernaut would mirror
French rival Chanel by raising prices in Europe while slashing them
in China.
"We do not think a unified price structure makes any sense,"
LVMH Chief Financial Officer Jean-Jacques Guiony said in a
telephone conference call.
In recent weeks, analysts and industry observers have raised
questions about the French firm's pricing strategy after Chanel
increased price tags in April on a number of its iconic handbags in
Europe while reducing retail prices in China, in a bid to eliminate
a growing price gap between Europe and Asia caused by the weakened
euro.
At the time, Chanel's policy was seen as a possible precursor
for the wider luxury industry as the drop in the euro against the
dollar and other currencies has led the cost of brand-name
accessories to vary greatly between Paris, Beijing and New York.
Though handbag prices have always been higher in markets beyond
Europe's borders, the current differential is significantly larger
than historical norms.
The weak euro, in addition to hefty Chinese import duties, has
exacerbated the existing gap for consumers from mainland China--a
key market for the sector leading consumers to stock up on luxury
goods, especially handbags, during trips to Europe. The price gap
has also caused the parallel market to mushroom, with individuals
reselling their oversees purchases through online on sites such as
Taobao, a Chinese site that is similar to eBay.
Nonetheless Mr. Guiony said that any decision regarding price
policy for LVMH mustn't be rushed.
"What currencies have done, currencies can undo," he said, when
commenting on the company's first quarter sales.
LVMH said Monday it recorded a 16% jump in first quarter sales
to 8.3 billion euros ($8.8 billion) from EUR7.2 billion in the same
period a year earlier. Most of the increase was due to gains from
favorable currency effects. The company said sales rose 3%
excluding currency effects, acquisitions and disposals.
Write to Nadya Masidlover at nadya.masidlover@wsj.com