Handbags at dawn (with an £80m purse): how a top fashion house rounded on a queen of the City

The date has been set for a duel not seen in Paris since the days of Cardinal Richelieu.

Next month two of the greatest fashion and luxury goods houses will align in combat with their chosen weapons: it will be handbags at dawn.

The prize is €110m (£80m), the staggering scale of a lawsuit and counter-action between LVMH (owners of Louis Vuitton and Christian Dior) and arch-rival Gucci (which also owns Yves Saint Laurent, Stella McCartney and Alexander McQueen).

And at the epicentre of the clash is the honour of a super-intelligent Irishwoman with long, flame-coloured hair.

Claire Kent, 39, is the luxury goods industry's most powerful analyst; her words are more terrifying to the fashion industry than the most catty of the catwalk critics.

Time magazine recently voted her one of the 25 most influential people in fashion, in a list that omitted the likes of Giorgio Armani, Donatella Versace and Ms McCartney.

Ms Kent has been rated as the top luxury goods analyst for nine of the last 10 years by Institutional Investor magazine and enjoys an unrivalled profile in the business media.

Yet such admiration is not shared by LVMH, which has accused her of targeting it in a "mission of destruction", whilst compiling favourable reports of Gucci, which happens to retain her company Morgan Stanley.

Ms Kent's mission, as defined by LVMH, is to "attack LVMH or its subsidiaries to enhance Gucci, Morgan Stanley's client".

Next month a court will be asked to examine an LVMH writ that includes 41 pieces of alleged evidence of bias, including a CD-Rom with 1,900 pages of research dating back four years.

Morgan Stanley has been outraged at what it describes as an "unjust and abusive" action and has counter-sued LVMH for €10m.

Last week at the Milan fashion week, Kent was sticking to her guns at a presentation to Italian journalists in which she recommended Gucci shares but gave only a neutral view of the prospects for LVMH (which stands for Louis Vuitton Moet Hennessey).

Her words were immediately picked up and reported by the industry bible Women's Wear Daily - and studied by fashion editors and investors across the world.

The verdict came in spite of a 97 per cent fall in profits recently announced by Gucci, which has been hard hit by the squeeze on the luxury goods market that has accompanied the downturn in the global economy and restrictions placed on international travel by terrorist threats and the Sars virus.

By contrast, LVMH, which has hired Jennifer Lopez as the face of Vuitton bags, recently reported a 24 per cent rise in its profits for the first half of this year.

In her report, Ms Kent conceded that Gucci - which admitted that the three month period to April this year was "the most difficult we have experienced" - had lost market share in the crucial leather goods sector to rivals like Louis Vuitton, Dior and Burberry.

She acknowledged "a weak performance of Gucci brand over [the] past year" but predicted a "strong bounce-back" for the company.

Ms Kent's confidence in the Gucci brand, founded by the Florentine designer Guccio Gucci in 1921, has infuriated LVMH and its owner Bernard Arnault, ever since the French billionaire failed in a 1999 hostile take-over of the Italian fashion group.

Morgan Stanley fought Gucci's corner until the arrival of a white knight in the form of French company Pinault Printemps Redoute. There has been animosity between LVMH and the American investment bank ever since.

Within 12 months, LVMH had written to Ms Kent her reports "lacked objectivity" and requesting she "refrained from making comments or issuing a rating on the group".

A year later, it upped the pressure further and banned the analyst from asking questions at briefings. The lawsuit for €100m was filed late year and goes before the French court on 17 November.

The furore in which Ms Kent is embroiled is Britain's most high-profile example of the backlash against the once all-powerful analysts, the great deal-makers of the 1990s who were once derisively described by Nigel Lawson, then Chancellor of the Exchequer, as nothing more than "teenage scribblers".

Such industry experts rose during that decade from relative obscurity and comparatively modest salaries to masters of the universes they inhabited.

But a series of scandals in America have seen the stock of the analyst fall far faster than even the markets themselves.

The stakes of next month's court battle are high because of the revolution that has taken place in the past decade in the luxury goods market.

Such items were once the preserve of the mega-rich and only a handful of companies - Gucci being perhaps the most prominent - existed to supply the demand.

But the upsurge in consumer spending during the Nineties was accompanied by the rise in the celebrity culture.

In Britain, readers of magazines such asHeat and Hello! are anxious to be seen with the designer accessories brandished by the likes of Victoria Beckham and Martine McCutcheon.

In a recent interview, Ms Kent observed: "During the Nineties there was a great deal of wealth around. People could afford to buy lots of brands."

Fashion houses saw what was happening and have used celebrities to market their goods - Kate Moss is the face of Burberry, now among the main players in the luxury goods market.

Stars such as Elizabeth Hurley, Madonna and Gwyneth Paltrow are encouraged to brandish the latest handbags and shoes at premieres and awards ceremonies.

Ms Kent said: "Celebrities are important to the luxury goods market. The value of that kind of endorsement is pretty much incalculable."

Profits for handbags, luggage, sunglasses and other accessories have come to outstrip those made from frocks.