PARIS — LVMH Moët Hennessy Louis Vuitton has squelched speculation the French luxury giant could acquire Coach, as a spokesman officially denied any interest in the American accessories marketer.
As reported, more than 13,800 Coach Inc. calls changed hands last Friday, fueled by takeover rumors. Typical volume for Coach calls is 2,500 contracts.
The denial comes a few days before LVMH is set to report its 2008 results at a press conference in Paris on Thursday.
In a research note last week, HSBC analyst Antoine Belge said LVMH should outperform its peers, thanks to the “superior resilience” of the Louis Vuitton brand and its cognac business. “Since 1990, the LV brand never recorded any year of negative organic growth,” the report says.
HSBC forecasts the group will post an organic sales decline of 4 percent in the fourth quarter, versus a 6 percent rise in the third quarter of 2008. The investment firm predicts a 7 percent decline in earnings before interest and taxes this year and “flat sales and EBIT in 2010.”
Analysts will be listening closely to the comments of LVMH’s chairman and chief executive Bernard Arnault, who presides over Thursday’s meeting, especially how the conglomerate “will balance between the need to protect margins in the downturn whilst maintaining the long-term competitive advantage of its brand portfolio,” the HSBC report says.
Also, “given that LVMH has a sound balance sheet and not made a significant acquisition since 2001, investors will look for hints that the group is eyeing M&A opportunities at a better price.”
Deutsche Bank is forecasting a 1.2 percent sales decline in the fourth quarter, with the belief that Vuitton “goes into 2009 with decent momentum.”
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