Market for Luxury Goods Ramps Up
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Affluent shoppers have started to spend again. Sales growth for luxury goods companies turned positive in the fourth quarter and has outpaced most other retail products. That's boosted shares of luxury companies such as Switzerland's Compagnie Financière Richemont, maker of Cartier and Montblanc, along with France's LVMH, owner of the Louis Vuitton brand. All areas of retail have benefited from hopes of a sustained economic recovery. But the impact on luxury is turbo-charged. Citigroup's Thomas Chauvet says high-end purchases tend to increase three times as fast as any increase in real global output, although a recessionary environment may reverse this effect.