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Vuitton Said to Hire 700 Leather Workers in 2011 to Meet Demand

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Feb. 21 (Bloomberg) -- Louis Vuitton, the fashion and accessories brand owned by LVMH Moet Hennessy Louis Vuitton SA, may hire as many as 700 leather workers this year to cope with rising demand, a person familiar with the plans said.

Additions will be made at factories in France, where about 70 percent of Vuitton’s leather goods are produced, as well as in Spain and California, said the person, who asked not to be identified because the matter is private. More increases may follow next year, according to the person.

Vuitton, which added 320 craftsmen last year, will open a factory in Marsaz, France, next month after inventory shortages led the Paris-based company to shutter 13 stores an hour early in the run up to Christmas. The maker of 500-euro ($685) Neverfull bags employs 4,000 to 5,000 leather workers, according to an estimate by Sanford C. Bernstein analyst Luca Solca.

LVMH intends to increase Vuitton’s production capacity “slowly, but surely” as demand outstrips supply, Chairman and Chief Executive Officer Bernard Arnault said this month.

Revenue at LVMH’s fashion and leather goods unit climbed 13 percent to 7.58 billion euros last year, excluding acquisitions and currency shifts. The outlook for 2011 is “excellent,” LVMH said earlier this month.

As demand for leather accessories increases, LVMH is also seeking to forge closer ties with Hermes International SCA after amassing a 20.2 percent stake in the Paris-based maker of Birkin bags. The world’s largest luxury goods maker won’t be a passive investor in Hermes and can provide the family-controlled business with strategic and operational help, Arnault has said.

Hermes wants LVMH to cut its stake to less than 10 percent, the head of the 174-year-old company’s founding family told Bloomberg News on Feb. 17.

To contact the reporter on this story: Andrew Roberts in Paris at aroberts36@bloomberg.net.

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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