Shop Talk

Check Out Line: More quarterly earnings to parse

Check out the latest raft of earnings for clues on the U.S. economy’s health.

LVMH, the world’s biggest luxury group, posted a forecast-beating 13 percent increase in same-store sales, helped by a strong rebound in the United States and Europe.

The Paris-based maker of Louis Vuitton handbags and Hennessy cognac said its wines, spirits, watches and jewelry businesses — all hard hit by the downturn — had benefited from improving consumer spending.

Echoing those thoughts, the Deloitte Consumer Spending Index moved upward in March following two consecutive months of decline. The improvement was driven by an improving job market, declining tax rates and slowing declines in home values.

“Improvements in home prices and employment could potentially fuel stronger consumer spending activity in the months to come,” Deloitte Research chief economist Carl Steidtmann said in a statement.

Meanwhile, women’s apparel retailer Talbots posted a narrow quarterly profit as leaner inventories boosted profit margins and full-price selling overshadowed a sales decline.

Spice maker McCormick said it expects earnings per share to rise 9 to 11 percent in 2011 and beyond, helped by cost cuts, as well as 4 to 6 percent growth in net sales.

At NY Fashion Week: LVMH invests in next-gen artisans

Inside a loft at Milk Studios , the DJs pumped up the beat and Champagne flowed as Renaud Dutreil talked about the future of fashion. As the chairman of LVMH Moet Hennessy Louis Vuitton Inc, the North American arm of the world’s largest luxury goods company, Dutreil has a lot invested in the subject.

The scene: A preview show mobbed by photographers and beautiful people.

“Louis Vuitton was an artisan,” Dutreil told Reuters, referring to the French company’s founder. “He worked with his hands. It’s important to transmit this value proposition to the next generation. They are the Web generation.”

On the runway: Some of the most whimsical styles shown during the Fall 2010 season of M.A.C. & Milk Fashion Week, the downtown cousin of Mercedes-Benz Fashion Week in New York. Both wrapped up late Thursday night.

Paper dress anyone? (That “cone bra” bodice reminiscent of Jean-Paul Gaultier is you.) These clothes won’t be sold at the mall. They’re the work of local master artisans, who were matched with 23 teams of students at Parsons The New School For Design in a student competition. LVMH and Parsons sponsored the contest.

Check out this video of Mr. Dutreil keeping an eye on the runway and some of the most inventive styles:

Just how wonderful is your brand?

Just how “wonderful” consumers think your brand is can help your stock price, especially in a recession, according to a study by market research agencies Kadence, Brand Care and So What Research.

The study looked at consumer perceptions of 650 leading U.S. brands and found there is a link between the affection consumers hold for a brand — or the “wonderfulness” of the brand – and its stock performance.  

According to the study, the ten most wonderful brands in the eyes of U.S. consumers are (in descending order) Hershey’s, Google, Sony, Kraft, Crayola, Kellogg’s, Scotch Tape, Wii, Rolls Royce and Johnson & Johnson.

The ten least wonderful brands are (from bottom up) National Enquirer, AIG, Botox, Kia, alli, Hummer, O The Oprah Magazine, Dress Barn, ChemLawn and Direct Buy.

In terms of value, brands that were seen as offering the best ratio of wonderfulness to cost were Wal-Mart, Google, Amazon, Hershey’s, Target, Cheerios, Campbell, PBS, Yahoo and eBay.

Brands that were seen as offering the worst ratio of wonderfulness to cost were Hummer, Botox, Prada, Land Rover, Gucci, AIG, Saks Fifth Avenue, Louis Vuitton, Maserati and Ferrari.

“Detailed analysis of responses shows a strong correlation between the level of consumer affection and stock performance in 2008,” said Owen Jenkins, CEO of Boston-based Kadence Business Research, in a statement. 

Bearish on handbags? Be that way, says Coach CEO

Sparks flew at an investor conference when a male retail analyst asked Coach Chief Executive Lew Frankfort a question that has confounded men for ages — how many handbags do women really need?Here’s the transcript from that exchange:Analyst: What is the pantry load or the handbag inventory of most women? And what happens to older handbags? Obviously women pay quite a lot of money for them. I’m just wondering how many they keep… I mean, can there be a significant detriment to sales in the future, just because there are a lot of handbags in women’s closets?Frankfort: Let me ask you, are there any women in your life that you might be able to ask how many handbags are too many? Most of us men in the audience know that women do spend, and we see it in all of our homes. In terms of how much is too much? It’s a theoretical question.We also have a very large segment of America who do not own Coach bags, and we continue to bring new consumers in to our franchise at a very attractive rate, and what women tend to do with bags is they retire the bags. They go to a place deep into the closet, and they purchase a new one, and that’s the reality.  I’m not sure where you are traveling with your questions.Analyst:  I’m traveling towards a consumer retrenchment and how people are going to retrench, and what their inventory of handbags may be for whenever the right occasion comes up. It’s — you know, we’re in uncharted (territory) here economically.Frankfort: Everything is uncharted. Everything is empirical, starting with this very moment. What you need to do is make calculated bets based on what you know, and what you think. And if you are bearish on handbags, be bearish.At that point, a female Coach executive cut in: I have never heard a man say, I am so sick of my black wallet, I need a red one. I cannot tell you how many times I have heard women say, I have to have this year’s red handbag.So it’s a perceived need for a woman …  I have to say something as the woman at the table.So, how many handbags (or wallets) do you have stashed away?(Photo: Reuters)

They lust for Leiber and buy Coach

When it comes to luxury handbags , wealthy American women view Leiber bags as the most prestigious,  but most often buy Coach, according to a survey released on Wednesday.

The survey, conducted by a research firm called The Luxury Institute, found Leiber scored highest on its “Luxury Brand Status Index”, which includes measurements for quality, exclusivity, social status and self-enhancement (meaning the brand can make the buyer feel special).

Tied for second out of thirty luxury brands included in the survey were Hermes and Tod’s, followed by Jimmy Choo, Bottega Veneta and Valentino.

While those brands scored the highest in terms of perception, here are the brands that survey respondents said they purchased most frequently in the past 12 months.

Coach was far and away the bag purchased most frequently, according to 25.7 percent of respondents, according to the survey. A distant second and third were Kate Spade, with 4.6 percent, and Gucci, with 4.1 percent.

Coach was also the bag the biggest number of respondents (27.4 percent) said they would buy the next time they purchased a bag, followed by Kate Spade and Louis Vuitton.

Wonder if that has to do with the brand’s familiarity? When asked “which of the following brands are you familiar with”, 74 percent of the survey’s more than 1,000 women with annual incomes over $150,000 said they knew of Coach.