Holiday test looms as luxury brands chase elusive rebound

A surge in luxury stocks has piled pressure on fashion houses including LVMH and Gucci owner Kering to show that signs of recovery in the third quarter can translate into a sustained turnaround in the key holiday season.

- MIMOSA SPENCER

People take pictures of festive window decorations at Printemps Haussmann department store in Paris last week.

(REUTERS)

Kering's shares have soared around 49% from three months ago, while Louis Vuitton owner LVMH is up 42%, Moncler up 28%, and Cartier owner Richemont up 27%.

Although some of that is linked to a broader equity market rally, there are also growing hopes among investors that the $400 billion sector is emerging from two years of sliding sales.

Third-quarter results showed some improvement in China - once the key engine of growth - and buzzy design debuts from newly-appointed creative directors have buoyed sentiment too.

But new styles will not hit the shops until next year and the jury remains out on China's economic recovery. Spending in another key market - the United States - also remains closely linked to a volatile stock market.

All of that raises the stakes for the December holiday season, which accounts for as much as 30% of annual sales for some brands, according to Vincent Redrado, founder of luxury industry consultancy Digital Native Group.