Further losses in luxury

Prada annouced this week a fall of 20% in its net profit in 2008 with a stagnant outlook for 2009. The top intalian luxury brand is confident, however, that it will obtain the EUR 2 billion loans by the end of June 2009, which will alllow the brand to pursue its international expansion plans.
Escada is slowly but surely approaching its bankruptcy, major shareholers have expressed deep concerns over the restructuring plan presented this week.
The series of negative news is completed by Bains yearly market report on luxury which estimates an overall 15% to 20% fall in 2009 for the entire luxury industry worldwide. Bain is a specialized luxury consulting company based in Milan and Paris.
We, at CPP, believe Hermes and Louis Vuitton will also begin to show weaker results as of March 2009, with a fall of up to 15% worldwide. Hermess least performing stores in 2009 are: Prague, New York (Wall Street), Moscow, Hong Kong and Mexico City