ABN AMRO 20090128

Luxury in crisis 4
We believe the luxury goods companies will face a severe downturn in 2009 and
2010, one that could be deeper and more prolonged for some companies than the
9/11 and SARS crises that hit the industry in 2001 and 2003.
Consumer propensity to spend looks set to slump 4
Luxury goods profitability in a downturn 7
FX: Major tailwind for sector in 2009F 14
Strong macro headwinds 16
We believe that household savings ratios in many western countries will need to
rise to structurally high levels, possibly surpassing historical levels (at least short
term). This savings rate adjustment may take several years to wash through.
Luxury goods sector performance 32
In this section we conduct a peak-to-trough PE multiple and share price relative
analysis for the luxury goods stocks that have a good enough history through
recession and boom.
Peak-to-trough analysis 32
Sector performance and valuation 37
Luxury goods market 39
Over the past four years, the luxury goods industry has expanded by a CAGR of
7%, to