LVMH says no way will do business with Amazon

Tue Oct 11, 2016 1:23pm EDT
 
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By Astrid Wendlandt

(Reuters) - Luxury goods group LVMH (LVMH.PA: Quote) said there was "no way" it would do business with Amazon AMZNO.O even though the Internet retailer was keen to take on more high-end brands.

Amazon currently sells mostly so-called "accessible luxury" brands such as Michael Kors, Calvin Klein and Kate Spade, but LVMH said it did not think it was an appropriate platform for its luxury brands.

"We believe the business of Amazon does not fit with LVMH full stop and it does not fit with our brands," LVMH Chief Financial Officer Jean-Jacques Guiony told investors in a conference call on Tuesday, after the group announced unexpectedly robust quarterly sales.

"There is no way we can do business with them for the time being."

Amazon has been growing its fashion, jewelry and watch retailing in recent years but failed to attract heavyweight luxury brands as they are concerned the U.S. retailer's product presentation and discounts could damage their image.

LVMH and other luxury goods groups such as Chanel and Richemont (CFR.S: Quote) fought hard to obtain the right from the European Commission in 2010 to refuse partnering with certain websites, citing worries about pricing and counterfeits.

LVMH's shares jumped by as much as 5.7 percent on Tuesday after the group reported much higher than expected third-quarter sales late on Monday, driven by strong trading at its flagship Louis Vuitton brand and revived demand from Chinese customers at home and abroad.

LVMH's sales figures boosted investor sentiment toward the luxury sector, which has been relatively bearish in recent months, and lifted shares of peers such as Richemont, which gained more than 3 percent on Tuesday, and Kering (PRTP.PA: Quote), up 2 percent.   Continued...

 
The logo of French luxury group LVMH is seen at the company headquarters in Paris, France, France, February 23, 2016.  REUTERS/Jacky Naegelen/File Photo