Luxury goods industry to eye Asian, U.S. deals

By Eleanor Wason

LONDON (Reuters) - European luxury goods companies are likely to make acquisitions in Asia and the United States to help expand outside of their core markets, Lehman Brothers' (LEH.N: Quote, Profile, Research, Stock Buzz) luxury goods expert Roberto Vedovotto said on Tuesday.

Companies that are internationally known but still make 70 percent to 80 percent of their sales in Europe could use acquisitions to gain access to distribution networks and cultural knowledge, Vedovotto said.

"There are Asian companies with interesting capital structure and management teams," Vedovotto, Lehman's chairman of European luxury goods, said at the Reuters Consumer and Retail Summit in London.

"They can be appealing for European investors wanting to expand in those regions where cultural factors need to be taken into consideration," he added, suggesting third-party suppliers but declining to name any specific companies.

Asia is the fastest-growing market for many luxury goods markets as rising affluence leads to increased demand for high-end products. Growing brand awareness has also helped lift U.S. spending.

Vedovotto saw initial public offerings as another key trend for the sector as many family-run luxury goods companies, particularly in Italy, evolve to better compete in new markets.

Vedovotto, who as chief executive officer took Italian luxury eyewear maker Safilo SFL.MI to market in 2005, said a listing often offered the ideal route for such businesses as it gave owners more flexibility.

"The IPO course is expensive and time-consuming and gives the company less privacy but overall it is extremely good for the brand itself," he said.  Continued...