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Jun 15, 2010
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ST Dupont to start selling in the U.S

By
Reuters
Published
Jun 15, 2010

ST Dupont, one of the last remaining French luxury pen and lighter makers, will soon starting selling in the United States and expects revenue in the current fiscal year to rise 5-10 percent.


Dupont's 2010 Limited Edition Neptune set

The 138-year-old company, rival of Britain's Dunhill and Germany's Montblanc which are owned by Richemont (CFR.VX), told the Reuters Global Luxury Summit it had obtained selling points at Saks (SKS.N), giving it a solid foothold in the U.S. market.

In addition, ST Dupont said customers in Russia and Eastern Europe, which in the past generated 10-11 million euros of revenue for the company, were back after a year-long absence.

"We had no business from them (Eastern Europe and Russia) for about one year but now they are coming back," ST Dupont Chief Executive Alain Crevet said in an interview in Paris.

Crevet, a former LVMH executive, said he also expected solid growth to come from Asia.

He said the company did not have the resources for advertising but relied on celebrities and French President Nicolas Sarkozy's state gifts of ST Dupont pens for publicity.

Since Crevet offered Sarkozy a black laquered ST Dupont pen to congratulate him on his election in 2007, the company has become a regular supplier to the Elysee Palace.

After Sarkozy offered two ST Dupont China-inspired pens to Chinese President Ju Hintao in April, orders for the model rose sharply.

Crevet said the company was also enjoying much success with its newly introduced low-priced brass lighters starting at 89 euros, which were promoted as environmentally friendly with the slogan "in the pocket... Not in the basket."

Crevet said 8 billion plastic disposable lighters were thrown out every year which, put together, would make eight Eiffel towers.

ST Dupont is known for its elegant square-shaped lighters, lacquered black pens that start at 200 euros ($246) and small leather accessories.

Listed in Paris since 1996, the company is controlled through a 69 percent stake by Asian retail tycoon Dickson Poon, who also owns British retailer Harvey Nichols.

The company's name is derived from the initials of its founder, Simon Tissot-Dupont, a leather goods craftsman whose descendents diversified into lighters during World War Two and into pens in the 1970s.

BREAK EVEN

Crevet said ST Dupont would be close to break-even for the year just passed, excluding exceptional items, and expected an operating margin of 5 percent for the current year to March 2011.

Looking forward, he said the company was targeting an operating margin of 20 percent for 2013 or 2014, somewhat below that of French luxury giant Hermes (HRMS.PA) which is around 24-25 percent.

Crevet estimated it would take about two years to return to pre-crisis levels and said he was concerned about the psychological impact the current European debt crisis would have on discretionary spending.

"People are going to save more and hold their purchases," he said. "There is not yet a softening in consumption, touch on wood, but I am worried it will come."

Shares in ST Dupont were up 5 percent to 0.21 euro by 1148 GMT.

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