PARIS (Reuters) - Luxury bellwether LVMH beat expectations on Tuesday with a 1% rise in fourth-quarter sales as demand for designer fashion and handbags picked up over the holiday season, adding to hopes the sector has turned a corner.

The owner of brands including Louis Vuitton handbags and Bulgari jewellery said sales for the three months to end-December reached 23.9 billion euros ($24.95 billion), as its main fashion and leather division almost matched last year's numbers and sales jumped at its retail unit.

The growth outpaced an expected 1.6% decline, according to a consensus forecast cited by Morgan Stanley.

Finance chief Jean Jacques Guiony told reporters LVMH saw a "slight trend of improvement" in the United States and Europe at the end of the year, with fashion and leather contributing more to the growth than at the beginning of the year.

LVMH's fashion division, home to its top earning Louis Vuitton and Dior labels, reported fourth-quarter sales of 11.1 billion euros, a year-on-year decline of 1%, but beating a consensus forecast for a 3.3% fall.

The division accounts for almost half of LVMH revenues and three-quarters of its recurring profit.

The results from Europe's largest company by market value provides further cheer for investors looking for signs it is pulling out of a slump.

The luxury industry is wrestling with its slowest sales rate in years, with consultancy Bain & Company estimating they fell globally 2% last year, weighed down by China's sluggish economy.

($1 = 0.9580 euros)