“The sky’s the limit,” says Yves Carcelle, the charismatic former textiles executive who has run Vuitton since 1990 and is widely credited with masterminding its turbo-charged growth.Levitating actLVMH chairman Bernard Arnault says the brand will keep roaring ahead, even though it has already quintupled sales and raised margins sixfold since he bought the company in 1989: “Of all the luxury brands, Vuitton has the greatest potential for growth.” Although LVMH doesn’t disclose sales for Vuitton alone, analysts reckon they grew at least 16 per cent worldwide last year and are likely to repeat that feat in 2004. Thanks to Vuitton’s levitating act, LVMH’s Paris-traded shares have almost doubled in the past 12 months to more than €60 (£41).Compare that with Gucci, which not only posted disappointing sales and reduced advertising spending last year but was also rocked by the announcement that designer Tom Ford was departing. And whereas Ford had reshaped Gucci in his own rock-star-inspired image, the power of Vuitton extends beyond the persona of well-regarded chief designer Marc Jacobs.Does Vuitton, which started as a maker of steamer trunks during the reign of Napoleon III, have its best days ahead of it? It still needs to wean itself from Japanese customers, who account for an estimated 55 per cent of sales. Vuitton must build sales in the US while tapping into rising affluence in China and India. It also needs to fight sophisticated global counterfeiting rings. Most of all, because Vuitton markets itself as an arbiter of style, it needs to keep convincing customers that they’re members of an exclusive club.Carcelle dismisses suggestions that Vuitton has limited growth potential. Yet it’s a crucial question for LVMH, which draws an estimated 80 per cent of its profits from Vuitton, thus propping up less-successful units, from the DFS Duty Free retail chain to couturiers Christian Lacroix and Givenchy.

“If LVMH didn’t have Louis Vuitton, it would be a disaster,” says Armando Branchini of InterCorporate, a Milan luxury consulting group. The touchiness of this issue was underscored recently when LVMH won a ruling in France that a Morgan Stanley analyst, who had cited Vuitton’s “maturity”, had downgraded LVMH’s shares unfairly. Morgan Stanley is appealing the decision, which awarded LVMH at least $39m in damages.These are serious concerns But Vuitton has some serious strengths. One is the loyalty of its clients, shoppers who think one Vuitton bag in the closet just looks too lonely.

“I save up for a while, and then I spend a lot on one item,” says Elizabeth Hanny, an Indonesian civil servant leaving Vuitton’s boutique on Paris’s Avenue Montaigne with a cylinder-shaped, Papillon-monogrammed toile bag that she just bought for $665 Hanny, 35, has shopped at Vuitton since she was 20. The racing organisation stands accused by the OFT of anti-competitive and monopolistic behaviour, particularly over the sale of its database (the “runners and riders”). Here was a separate body charged with putting racing’s interests first, and accountable to the entire sport, taking over responsibilities such as planning, fixtures, finance and marketing.But in the past few years, the BHB’s reputation has become sullied and by April last year, it was under investigation by the OFT. The Jockey Club was set up in 1752 by a handful of wealthy breeders and enthusiasts.

As the sport grew, it was accepted that the narrow remit of the club was insufficient, and in 1993 the BHB was born.This should have been the answer to racing’s prayers. “You have bookmakers, the courses, owners, trainers, punters, who ultimately all take different things out of racing.”Part of the problem lies in racing’s heritage. “We don’t get on, and that’s where all the problems start,” says one bookmaker. The three-day festival, which gets under way on Tuesday, traditionally marks the start of the racing season.
But behind the facade, racing is in a mess. The Office of Fair Trading is investigating the British Horseracing Board, the sport’s main governing body; two jockeys, including champion rider Kieren Fallon, last week found themselves embroiled in race-fixing allegations; and at the end of this month, a much-hyped £307m media rights deal is set to unravel just three years into what was expected to be its 10-year lifetime.Elsewhere, the Tote, the state body that operates pool, as opposed to fixed-odds, betting, is being privatised, while the Gambling Bill, intended to overhaul the UK’s unruly gaming legislation, is now in front of a parliamentary scrutiny committee.Yet, rather than pulling together at this pivotal time, racing is at war with itself. The Cheltenham Gold Cup is racing at its biggest and brashest.