Last July, reporting LVMH's first-half results, Jean-Jacques Guiony, chief financial officer of LVMH, made a pointed observation: group operating profit increased by only 7 per cent, due to the impact of the biggest currency fluctuations the group had ever seen. At constant exchange rates operating profit would actually have risen 19 per cent.

When asked for his thoughts in January on the outlook for 2009, he remained cautious: “It's difficult to say how things will pan out in 2009 until we know better how things unfold from a currency perspective,” he said. “Volatility is at an unprecedented level and making any predictions is highly risky.”

Most luxury companies find themselves with the majority of their costs in euros but up to 80 per cent of their revenues in other currencies. In the past, they have protected themselves against fluctuations through the use of hedging but in the current economic climate, things change so quickly that, according to Claudia D'Arpizio, luxury goods expert at Bain & Co in Milan: “While currency hedging is a useful technique, we are also advising our clients to focus on pricing.”