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Sep 9, 2011
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Lack of visibility puts Barbara Bui on back foot

By
Reuters
Published
Sep 9, 2011

Barbara Bui
Barbara Bui - SS11 collection
PARIS, Sept 9 (Reuters) - Barbara Bui , one of France's few listed fashion brands, believes trading has become more unpredictable than six months ago as it frets that debt problems in the United States and euro zone could weigh on consumer sentiment.

The next four months to Christmas are crucial for margins at fashion brands because this is when they are able to sell the most items at high prices. Falling demand during this period would hit them harder than earlier in the year.

"From now on, every day counts (in terms of margins) and I don't like this lack of visibility," Deputy Chief Executive Jean-Michel Lagarde told Reuters in an interview at the Paris leg of the Vogue Fashion Night Out, a global event organised by the glossy magazine to encourage people to shop.

"We are all feeling a little bit on the defensive. We are worried as we don't know what will happen."

His comments come after Swiss luxury group Richemont warned this week the strong sales growth it had enjoyed this year might not last, as economic uncertainty made consumers more hesitant about splashing out on upmarket products.

The luxury goods industry has proven more resilient than other consumer markets to variations in economic confidence.

Last month, Hermes , the maker of 7,500-euro ($10,500) Birkin leather bags, said it had not seen a drop in the number of people visiting its shops nor a weakening in sales over the summer, in spite of a worsening economic climate.

But if the luxury market has been enjoying a historic rebound since the downturn of 2008, some brands such as Barbara Bui are concerned future growth could slow much faster than expected.

"We have not seen signs of a slowdown but, six months ago, we never thought there could be a slowdown," Lagarde said.

Top on the list of concerns is demand from U.S. department stores, major clients of luxury brands, which could cut their orders in anticipation of a spending lull.

Yet other luxury brands such as Dior , part of the world's biggest luxury group, LVMH , are confident demand from big emerging markets such as China will continue to drive sales.

"There is a financial crisis but there are also emerging markets which are doing very, very well," Sidney Toledano, Chief Executive and Chairman of Dior, told Reuters at the Vogue Fashion Night Out.

"Luxury is doing well because, for top-quality work, there will always be demand."

($1 = 0.714 Euros) (Additional reporting by Elizabeth Pineau; Editing by David Hulmes)

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