The People Want Champagne and Watches

Luxury goods purveyors such as LVMH are offsetting slowing sales in the U.S. with healthy profits from emerging markets like Russia and China
Louis Vuitton bags are displayed for purchase at the MOCA Los Angeles media preview of "(C) Murakami" at The Geffen Contemporary at MOCA on October 26, 2007 in Los Angeles, California. Noel Vasquez/Getty Images

When Bernard Arnault, chief executive of the largest luxury goods group in the world, Paris-based LVMH Moët Hennessy Louis Vuitton (LVMH.PA), took the podium Feb. 6 on ritzy Avenue Montaigne to report on the company's performance over the past year, the downturn plaguing many of his competitors did not feature on his agenda. Sure, a recession might be taking place in the U.S., and some luxury shoppers are feeling the pinch (, 1/11/08). But that didn't stop LVMH from posting profits of $2.96 billion in 2007, up 8%, on sales of $24.1 billion, also up 8%.

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