• Proprietary 2003-2008 market value data with a detailed analysis of regional sales for Europe, America, Japan, Asia Pacific and the Middle East.

• Global consumer expenditure on luxury, high-end non-food goods comprising clothing, accessories, jewellery, watches, fragrance and cosmetics.

• Comprehensive profiles of Bulgari, Burberry, Christian Dior, Giorgio Armani, Gucci Group, Hermès, LVMH, Polo Ralph Lauren, Richemont and Valentino.

• Five year trading records of each competitor, including growth rates and operating margins, with Verdict's outlook on each business.

Highlights

Dramatic repercussions from the financial crisis are impacting the real economy and the luxury sector is certainly not immune. Judging by trading updates for Q4 2008 and Q1 2009 demand for certain segments of the luxury goods sector has fallen off a cliff. Luxury retailers are currently facing the toughest market conditions for two decades.

We believe that there will be no significant recovery in the foreseeable future either, with the latter half of 2010 perhaps offering some relief. Generally speaking, an era of consumer frugality has set in and has left its mark on the luxury sector, in sales terms luxury has clearly lost some of its lustre.

Arguably this is the worst environment in decades and forces retailers to innovate. And there are still some growth opportunities open to retailers. Luxury goods retailers should focus on quality, introduce sub brands in a careful manner, try out new routes to market, such as the internet or shopping centres, and cut costs.

Reasons to Purchase

• Assess market potential and threats by accessing sector size data and seeing how consumers and retailers have reacted to recent economic turbulence.

• Use comprehensive company profiles on business models and financial and operational performance measures to benchmark your company's performance.

• Identify opportunities for cost cutting initiatives that will positively impact sales without hurting the unique luxury brand and proposition.

CHAPTER 1 EXECUTIVE SUMMARY 6
Key findings 6
Main conclusions 8
CHAPTER 2 MARKET ANALYSIS 12
Luxury market definition 12
Regional summary 14
Europe 18
Economic overview - synchronised downturn 18
Luxury 21
Americas 27
Economic overview - negotiating the liquidity trap 27
Luxury 28
Asia Pacific 33
Economic overview - the myth of decoupling 33
Luxury 35
Japan 39
Economic overview - the threat of a second lost decade 39
Luxury 40
Middle East & others 43
Economic overview - dependence on the oil price 43
Luxury 44
Product trends 47
CHAPTER 3 KEY ISSUES & OUTLOOK 51
Key issues 51
As the economic slowdown shows luxury is not immune... 51
... consumers renew their focus on quality 52
Sales driver opportunity I: Sub brands and product extension 52
Sales driver opportunity II: Licensing into new areas 53
Sales driver opportunity III: Diversification into travel and wellness 54
Sales driver opportunity IV: Branching into homewares 57
Sales driver opportunity V: The changing perception of the Internet, from threat to saviour 58
Sales driver opportunity VI: EU shopping centres as new distribution channels, go fishing where the fish are 61
Advertising - cutting budgets or finding new marketing opportunities? 65
Cost cutting has become the major issue facing the industry, the vital question is where? 68
Outlook 69
Two key drivers reverse - as the numbers of millionaires and travel are down 69
Currency fluctuations create front and back end havoc 70
Attitude change: bling is out 70
Influence of department stores - a struggling sector, no quick turnaround in sight 71
Counterfeiting persists and could get worse in the crisis 74
Emerging markets - decoupling was a myth... 75
... however there remains a long term opportunity, though it will be different from what was previously assumed 76
Forecast - heading for one of the worst years on record 77
CHAPTER 4 COMPANY COMPARISONS 79
Key Operating Statistics 79
Market shares 82
CHAPTER 5 BULGARI 83
Company overview 83
Recent key developments 84
Trading record 85
Store portfolio 89
Outlook 90
CHAPTER 6 BURBERRY 91
Company overview 91
Recent key developments 93
Trading record 93
Year to end March 2008 94
Year to end March 2009 95
Store portfolio 98
Outlook 99
CHAPTER 7 CHRISTIAN DIOR 101
Company overview 101
Recent key developments 102
Trading record 104
Store portfolio 107
Outlook 108
CHAPTER 8 GIORGIO ARMANI GROUP 109
Company overview 109
Recent key developments 110
Trading record 112
Store portfolio 116
Outlook 117
CHAPTER 9 GUCCI GROUP 119
Company overview 119
Recent key developments 120
Trading record 121
PPR 121
Gucci Group 122
Recent key developments - Gucci Group 123
Trading record 125
Store portfolio 129
Outlook 130
CHAPTER 10 HERMÈS 131
Company overview 131
Recent key developments 133
Trading record 134
Store portfolio 137
Outlook 137
CHAPTER 11 LVMH 139
Company overview 139
Recent key developments 141
Trading record 143
Current trading 146
Store portfolio 150
Outlook 152
CHAPTER 12 POLO RALPH LAUREN 153
Company overview 153
Recent key developments 154
Trading record 155
Current trading 156
Store portfolio 160
Outlook 161
CHAPTER 13 RICHEMONT 163
Company overview 163
Recent key developments 164
Trading record 165
Jewelry maisons 166
Specialist watchmakers 166
Leather & accessories maisons 166
Store portfolio 168
Outlook 170
CHAPTER 14 VALENTINO FASHION GROUP 171
Company overview 171
Recent key developments 172
Store portfolio 176
Outlook 176
CHAPTER 15 OTHER PLAYERS 178
Chanel 178
Coach 178
Dolce & Gabbana 179
Folli Follie 180
Jimmy Choo 180
Mulberry 180
Prada 181
Salvatore Ferregamo 182
Tiffany & Co 183
Versace 184
CHAPTER 16 GLOSSARY 186
Luxury market definition 186
Financial statistics - VAT 187
Abbreviations 188

List of Tables
Table 1: Global consumer spend on luxury branded product 2003-2008 13
Table 2: Global luxury expenditure by region 2003−2008 14
Table 3: Y-o-Y change % in global luxury spend by region 2004−2008 15
Table 4: Euro area economic indicators 2007-2010f 18
Table 5: US economic indicators 2007-2010f 27
Table 6: Canada economic indicators 2007-2010f 28
Table 7: China economic indicators 2007-2010f 33
Table 8: Newly industrialized Asian economies economic indicators 2007-2010f 34
Table 9: India economic indicators 2007-2010f 34
Table 10: Japan economic indicators 2007-2010f 39
Table 11: Middle East economic indicators 2007-2010f 43
Table 12: Global luxury expenditure by product sector (€bn) 2003−2008 47
Table 13: Global luxury expenditure by product sector ($bn) 2003−2008 47
Table 16: Global luxury market regional forecast for 2009 78
Table 17: Luxury brands key operating statistics in € years ending 08/09 79
Table 18: Market shares of 10 key luxury retailers 2003-2008 82
Table 19: Bulgari company overview 2009 83
Table 20: Bulgari trading record ($) 2003-2008 85
Table 21: Bulgari trading record (€) 2003-2008 86
Table 22: Bulgari retail stores 2003-2008 89
Table 23: Burberry company overview 2009 91
Table 24: Burberry trading record in US$ 2003/04-2008/09 93
Table 25: Burberry trading record in local currency (£) 2003/04-2008/09 94
Table 26: Burberry directly operated retail stores & concessions 2004-2009 98
Table 27: Christian Dior company overview 2009 101
Table 28: Christian Dior Group consolidated trading record in US $ 2003-2008 104
Table 29: Christian Dior Group consolidated trading record in € 2003-2008 104
Table 30: Christian Dior Group retail stores 2002-2007 107
Table 31: Giorgio Armani company overview 2009 109
Table 32: Giorgio Armani trading record in US$ 2003-2008 112
Table 33: Giorgio Armani trading record in € 2003-2008 112
Table 34: Giorgio Armani brands retail store numbers 2006 & 2008 116
Table 35: PPR company overview 2009 119
Table 36: PPR trading record ($) 2003-2008 121
Table 37: PPR trading record (€) 2003-2008 121
Table 38: Gucci Group company overview 2009 122
Table 39: Gucci Group trading record ($) 2003-2008 125
Table 40: Gucci Group trading record (€) 2003-2008 125
Table 41: Gucci Group number of company owned stores 2003-2008 129
Table 42: Hermès company overview 2009 131
Table 43: Hermès trading record in US$ 2003-2008 134
Table 44: Hermès trading record in € 2003-2008 134
Table 45: Hermès number of retail outlets 2003-2008 137
Table 46: LVMH Group company overview 2009 139
Table 47: LVMH Group trading record in US$ 2003-2008 143
Table 48: LVMH Group trading record in € 2003-2008 143
Table 49: LVMH luxury* trading record in US$ 2003-2008 144
Table 50: LVMH luxury* trading record in € 2003-2008 144
Table 51: LMVH luxury division trading record 2003-2008 145
Table 52: LVMH retail stores 2003-2008 150
Table 53: LVMH Group retail stores by region 2003-2008 150
Table 54: Polo Ralph Lauren company overview 2009 153
Table 55: Polo Ralph Lauren trading record in US$ 2002/03-2007/08 155
Table 56: Polo Ralph Lauren regional net revenues in US$ 2005/06-2007/08 156
Table 57: Polo Ralph Lauren retail outlets 2008 160
Table 58: Richemont company overview 2009 163
Table 59: Richemont trading record 2003/04-2008/09 165
Table 60: Richemont brands number of retail stores 2002/03-2007/08 168
Table 61: Valentino Fashion Group company overview 2009 171
Table 62: Valentino Division and Fashion Group trading record ($) 2003-2008 173
Table 63: Valentino Division and Fashion Group trading record (€) 2003-2008 174
Table 64: Valentino Division store portfolio 2004-2008 176

List of Figures
Figure 1: Global luxury expenditure (€bn) per region 2003 and 2008 16
Figure 2: Global luxury expenditure ($bn) per region 2003 and 2008 17
Figure 3: Global luxury regional expenditure split (€%) 2008 17
Figure 4: European luxury retail spend (€) and growth 2003−2008 22
Figure 5: European luxury retail spend ($) and growth 2003−2008 23
Figure 6: Tsum Moscow 2008 24
Figure 7: Gum Moscow 2008 26
Figure 8: Americas luxury retail spend (€) and growth 2003−2008 29
Figure 9: Americas luxury retail spend ($) and growth 2003−2008 30
Figure 10: Gucci Las Vegas 2008 32
Figure 11: Asia Pacific luxury retail spend (€) and growth 2003−2008 35
Figure 12: Asia Pacific luxury retail spend ($) and growth 2003−2008 36
Figure 13: Japan luxury retail spend (€) and growth 2003−2008 40
Figure 14: Japan luxury retail spend ($) and growth 2003−2008 41
Figure 15: Middle East luxury retail spend (€) and growth 2003−2008 44
Figure 16: Middle East luxury retail spend ($) and growth 2003−2008 45
Figure 17: Global luxury expenditure by product sector (€bn) 2003 & 2008 48
Table 14: Global luxury spend growth by product sector (€%) 2004−2008 49
Table 15: Global luxury spend growth by product sector ($%) 2004−2008 49
Figure 18: Product share of global luxury expenditure 2008 50
Figure 19: Burj Dubai (under construction) Dubai 2009 55
Figure 20: Armani Privé Milan 56
Figure 21: Armani Ristorante New York 56
Figure 22: Armani Casa Bond Street, London 2009 58
Figure 23: Westfield London 2008 61
Figure 24: The Village, Westfield London 2008 62
Figure 25: The Village, Westfield London 2008 63
Figure 26: The Village, Westfield London 2008 64
Figure 27: Chanel mobile art exhibition New York 2008 66
Figure 28: Chanel iPhone haute couture app 67
Figure 29: House of Fraser, Westfield London 2008 71
Figure 30: House of Fraser, Westfield London 2008 72
Figure 31: Christian Louboutin counterfeit goods warning online 74
Figure 32: Global luxury market (€bn) forecast for 2009 77
Figure 33: Luxury brands regional sales split (%) 2008 80
Figure 34: Operating margins of luxury brands 2008/09 81
Figure 35: Bulgari product sales split 2007 & 2008 87
Figure 36: Bulgari regional sales split 2008 88
Figure 37: Burberry product sales split as at March 2003 & 2008 95
Figure 38: Burberry regional sales split 2008 97
Figure 39: Burberry stores by region including franchises as at March 2009 99
Figure 40: Christian Dior Group incl LVMH product sales split 2003 & 2008 105
Figure 41: Christian Dior Group brands regional sales split 2008 106
Figure 42: Armani label sales incl licensed products by brand 2005 & 2008e 113
Figure 43: Giorgio Armani brands regional sales split 2008 114
Figure 44: Armani label sales incl licensed sales by product 2003 & 2008 115
Figure 45: Gucci Group brands sales split 2008 127
Figure 46: Gucci Group brands regional sales % 2008 128
Figure 47: Hermès product sales split 2003 & 2008 135
Figure 48: Hermès brands regional sales split 2008 136
Figure 49: LVMH fashion & leather goods regional sales split 2008 147
Figure 50: LVMH perfume & cosmetics regional sales split 2008 148
Figure 51: LVMH watches & jewelry regional sales split 2008 149
Figure 52: LVMH regional store estate 2008 151
Figure 53: Polo Ralph Lauren product sales split 2003/04 & 2007/08 158
Figure 54: Polo Ralph Lauren brands regional sales split 2008 159
Figure 55: Polo Ralph Lauren regional store estate as at March 2008 161
Figure 56: Richemont product sales split as at March 2007& 2008 165
Figure 57: Richemont brands regional sales split 2008 167
Figure 58: Valentino Fashion Group regional sales split 2008 175
Figure 59: Dolce & Gabbana Bond Street, London 2009 179
Figure 60: Prada Bond Street, London 2009 181
Figure 61: Salvatore Ferregamo 2009 182
Figure 62: Tiffany & Co Madrid 2008 183
Figure 63: Tiffany & Co Westfield, London 2008 184