Louis Vuitton targets middle-income shoppers with perfume launch

Fri Sep 2, 2016 10:03am EDT
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By Astrid Wendlandt and Pascale Denis

PARIS (Reuters) - Louis Vuitton has launched its first perfume range since the founding merger of its parent LVMH (LVMH.PA: Quote) in 1987, targeting middle-income shoppers amid a downturn in luxury spending.

This week's launch is an important step for the French brand as it tries to strike the delicate balance between increasing its number of more affordable goods while retaining its cachet.

Until now, shoppers on more modest incomes have only been catered for by Louis Vuitton's key chains and very small leather goods, costing around 200-300 euros apiece.

But the brand needs to boost sales growth after a sharp slowdown in the past three years, and with little sign of an industry recovery as security fears and geo-political uncertainty hit the tourism flows vital for luxury brands.

Louis Vuitton's collection of seven perfumes, with names including "turbulences" and "matiere noire" or "dark matter," are on sale for around 200 euros ($224) for a 100 ml bottle.

That is close to the price of niche perfume brands such as By Kilian, which have been enjoying sales growth four to five times higher than big, traditional fragrance providers whose prices cost under 100 euros.

Perfume has been more resilient to the industry downturn than some parts of the luxury market, with global sales estimated to have risen 2.9 percent to about 15 billion euros last year. Within that, sales by niche brands jumped about 15 percent to around 1 billion euros.

At first, Louis Vuitton will sell the perfumes in only about 180 of its 460 stores. Analysts estimate they could generate 60-80 million euros of sales in the first year.   Continued...

The new collection of bottles of perfume is seen as Louis Vuitton launches seven fragrances created by perfumer Jacques Cavallier, in Paris, France September 2, 2016. REUTERS/Christian Hartmann