An announcement by LVMH, the world's leading luxury-products group, that it had raised its stake in Italian fashion company Gucci has sparked speculation that the latest craze for mega-mergers and acquisitions had entered a new sector.

LVMH Louis Vuitton Moet Hennessy - owner of the Christian Dior, Christian Lacroix, Louis Vuitton, Givenchy, Guerlain and Kenzo labels, among others - said it had raised its share in Gucci to 5 per cent. The French company did not say whether or not it intended to boost its stake further, causing share prices in both groups to soar and prompting a spill-over of speculation into other luxury stocks.