Paris - French luxury goods giant LVMH fought off a plunge in its shares Wednesday, reassuring that Chinese consumers were still hungry for goods from the key Louis Vuitton part of the business where sales flagged.

The price of shares in the global group was showing a fall of 6.42 per cent to 135.55 euros in an overall French market down 0.76 per cent.

Analysts at Bank of America-Merrill Lynch lowered their investment recommendation for the shares on Wednesday.

At brokers Aurel BGC, analyst David Da Maia said: "The setback for Louis Vuitton in the third quarter is likely to weigh on all luxury company shares."

LVMH also said that currency factors played a role in the performance of sales by the group.

The Louis Vuitton range of products again lagged those of the fashion and leatherware brands.

Louis Vuitton accounts for more than 70.0 per cent of annual sales of the fashion and leatherware division which also includes the brands of Celine, Givenchy, Fendi and Kenzo. Vuitton is the main profit driver of the entire LVMH group.

It turned in sales estimated to total 7.3 billion euros (US$9.9 billion) last year but since then has had difficulty in generating growth.

In the third quarter, internal growth of sales by fashion and leatherware brands, excluding the effect of exchange rates, did not exceed 3.0 per cent, totalling 2.4 billion euros, from an increase of 7.0 per cent in the second quarter.

The finance director of LVMH, Jean-Jacques Guiony, said during a telephone press conference that "growth by Vuitton was slightly below" that of the division as had been the case in the previous quarters this year.

The group said that changes in currency values notably of the yen and dollar had undermined sales in each quarter of this year and particularly in the third quarter with a negative impact of 6.0 per cent.

Guiony said that the slowing of fashion and leatherware reflected in part a "significant price increase by Vuitton in Japan in July which consumers had anticipated by buying beforehand, which had caused sales to fall later.

Other brands in the division had achieved slightly weaker growth than in the first half, he said.

Chinese consumers of luxury goods, whether they shopped at home or while travelling, were not turning their backs on Vuitton and the sales trend in this market was about the same as at the beginning of the year.

Sales in the United States were "reasonably good" and "in Europe as well due to thanks to tourists", particularly from China.

Sales in Asia were steady.

Guiony said that an easing of sales to Japanese customers reflected a fall in Japanese tourism because the yen was weak.

Vuitton handbags go to town up-market

However, experts in the sector say that people looking for luxury goods were increasingly demanding, being less interested that before in the brand and more in exclusive products.

Louis Vuitton has reacted to this since the brand began to slow down last year and has begun this year to go further up market to contain the risk of its products being seen as rather ordinary.

Demand for new lines of handbags made of leather, priced at three or four times the price of some of Vuitton's hallmark fabric bags, was "very strong" more or less everywhere in the world, Guiony said.

This repositioning was expected to take about 18 months.

Meanwhile, Vuitton has yet to find someone to replace American designer Marc Jacobs following the announcement at the beginning of October that he was leaving the company to develop his own label.

Experts in the sector say that LVMH should now focus on developing some of its small brands.

In addition to the fashion and leatherware activities, the perfumes and cosmetics sides of the business also disappointed investors.

But the wines and spirits activities did better than expected, notably because of a boost from the Champagne sector, and so did sales of watches and jewellery.

The star sector of the group is its range of special distribution channels, pulled by the perfume chain Sephora which achieved growth of 20-25 per cent in Asia and of 10.0 per cent in the United States, and of its Duty Free Shops (DFS), mainly in Asia.