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EQUITY MARKETS bc July 2004 Eastern promise Luxury goods review Pan European Equity Consumer Luxury goods Analyst Gilles Lequeux WestLB Luxury goods review – Eastern promise 22 July 2004 1 Executive summary Summary of recommendations Two top-line triggers: watches and tourism LVMH Buy Our top picks are LVMH and Richemont, as we think that the recoveries in US and Asian Richemont Buy travel retail and the watch market will more than offset less vigorous consumption in Burberry Outperform continental Europe and the low level of the dollar versus the euro. Christian Dior Outperform Bulgari Neutral Hermès Neutral The environment is improving. Sales in Asia (ex Japan) and the USA are growing very Tod’s Neutral fast. Travel retail in Asia is also recovering, as Japanese tourists are travelling in this region, buying abroad where luxury goods items are cheaper (though as a consequence
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