July 31 (Bloomberg) -- Gucci’s billionaire owner, Francois- Henri Pinault, said the world’s luxury-goods market has stopped worsening, while sustained demand for designer Frida Giannini’s handbags in China helped the label beat analysts’ estimates.

Shares of Pinault’s PPR SA, Gucci’s French parent company, soared as much as 10 percent to the highest since Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15, 2008. That failure spooked buyers of expensive handbags and watches, sending demand plummeting across the industry.

“Global luxury sales aren’t deteriorating anymore at all,” Pinault said in an interview after PPR’s press conference in Paris today, which discussed the company’s first-half results. “September will be the key month to see if we have hit the bottom, if the recovery is coming.”

A swath of European luxury-goods makers said that sales were stabilizing or improving this week. Italy’s Bulgari SpA, maker of jewelry that can cost as much as 150,000 euros ($212,235), reported a narrower loss yesterday. Louis Vuitton, the largest fashion brand owned by LVMH Moet Hennessy Louis Vuitton SA, reported sales growth above 10 percent.

“PPR results were sustained by the resilient performance of its Gucci luxury mega-brand, much like LVMH results relied on the resilience of its Louis Vuitton mega-brand,” Sanford C. Bernstein analyst Luca Solca said in a note today. Gucci’s early penetration of the Chinese market when compared to luxury rivals paid off this year, he said.

First-half sales of luxury goods advanced 11 percent in China and Hong Kong, and 15 percent in emerging markets, Paris- based PPR said. That helped offset declines in North America, Europe and Japan. At the core Gucci brand, sales grew 14 percent in China, including Hong Kong.

Soaring Shares

Shares of PPR had their steepest intraday gain since Feb. 6, and were up 5.70 euros, or 8 percent, to 76.75 euros at 3:06 p.m. in Paris.

PPR’s earnings before interest, tax, depreciation and amortization slipped 1.8 percent to 925 million euros ($1.3 billion). That topped the 791 million-euro average estimate of five analysts compiled by Bloomberg. Net income dropped to 189 million euros from 777 million euros a year earlier, when PPR sold its YSL Beaute cosmetics unit.

Gucci Group’s stable of luxury brands, which also include Bottega Veneta and Boucheron besides the namesake brand, outweighed declining sales at PPR’s other businesses, such as France’s Conforama furniture chain and Fnac bookstores.

Operating margin at Gucci declined by 1.1 percentage points to 26 percent after profits were hurt by the weakness of the yen against the euro and the label paid higher royalties, Pinault said. The margin should recover to its previous levels as economic conditions improve, he said.

To contact the reporter on this story: Ladka Bauerova in Paris at lbauerova@bloomberg.net.

Last Updated: July 31, 2009 10:13 EDT