Published: WWD, Friday, May 12, 2006 Arnault Lauds Brands at LVMH Annual By Miles Socha with contributions by Emilie Marsh PARIS Louis Vuitton a mature brand? Nonsense, Bernard Arnault said Thursday at LVMH Moët Hennessy Louis Vuitton's annual shareholders' meeting, suggesting Vuitton has "the most potential for growth" among the group's galaxy of star brands. He also boasted that fast-growing Sephora, once targeted for possible disposal, could one day become a "little Vuitton" as profit margins continue to fatten. Sounding relaxed and upbeat, an effusive Arnault voiced optimism for the high-flying luxury sector, and said LVMH's sales in April accelerated from the first quarter, when sales vaulted 15 percent, to 3.56 billion euros, or $4.27 billion. "The start of the year has been excellent," he said, citing strong growth in the U.S., China and Asia and a continued rebound in Japan. "All economic indicators are favorable." His principle grumble was European monetary policy, which he said is strangling growth on the continent; France in particular holds the distinction of "most difficult" market for the luxury giant. He also took a swipe at French union authorities, which are seeking to halt Sunday openings of the world's biggest Vuitton store on the Champs-Elysées. Otherwise, Arnault was brimming with confidence and salesmanship, trumpeting, for example, Dior's new Capture Totale skin cream with special ingredients harvested in Madagascar. "All the women who use it tell me their wrinkles disappear," he assured his audience, prompting a round of chuckles through the room. At times, Arnault took on the tone of a professor, explaining to a capacity crowd of shareholders at the Carrousel de Louvre here the delicate task of building fashion brands and coaxing profits out of businesses that hinge on creativity and artisanal production methods. "It's not a miracle," he said, repeatedly mentioning the example of Fendi, where a turnaround is gaining traction. He said the key was finding the right formula, and then "pressing on the accelerator." Fond of the car-racing metaphor, he continued, "One must take into consideration the fragility of a company. It's like putting a truck driver into a Formula One race. After the first lap, you will wind up in a ditch." Arnault said success means finding "a designer who is inspired by the brand and its DNA, and an inspired manager who can professionally develop all of the global processes. It's not easy." Arnault listed Loewe, Celine, Pucci and Marc Jacobs as his next stars in the making. During a question-and-answer session, Arnault revealed that the future of the Samaritaine department store, shuttered for six years to correct grave safety concerns, is under study. He said it would remain dedicated to retail, "but it's premature to say what we are going to do. Nothing is concluded." Shareholders approved the appointment of Arnault's son, Antoine Arnault, to the company's board, where he joins his older sister, Delphine.