Luxury Goods

Viewsroom: LVMH wants more sparkle

31 Oct 2019

The $200 bln luxury conglomerate is making a $14.5 bln bid for Tiffany. The iconic brand known for putting its bling in blue boxes would be wise to accept the proposal. Plus: Venezuela’s leadership saga and a surreal debt drama collide. And: the world’s most expensive chocolate.

Tiffany lacks a sparkling defence strategy

28 Oct 2019

The iconic U.S. jeweller is facing a $14.5 bln bid from LVMH. Staying independent may be tough: Its turnaround has a way to go and faces headwinds in Hong Kong. But Bernard Arnault could go higher, or others may join the fray. Working to boost the price tag is Tiffany’s best bet.

Tiffany splurge is affordable indulgence for LVMH

28 Oct 2019

Buying the $12 bln purveyor of blue-boxed trinkets would bulk up the French giant’s jewelry business and its U.S. presence. Though pricey, a deal would not stretch Bernard Arnault’s cash-gushing group. It also throws down a diamond-studded gauntlet to rivals Richemont and Kering.

Zooming luxury cars expose a two-speed China

15 Oct 2019

Mercedes-Benz and peers notched up double-digit sales growth during the last quarter. The wider Chinese auto industry, though, is in the doldrums, and faces a 5% decline this year. It lays bare a widening wealth gap that is already sending more brands scrabbling upmarket.

Luxury yachts IPO tests Chinese salvaging skills

18 Sep 2019

Ferretti, the maker of boats beloved by stars like George Clooney, is cruising to a Milan listing a decade after its shipwreck. State-owned Weichai spent 470 mln euros to rebuild the brand from near insolvency. The Chinese group needs an LVMH-like valuation to double its money.

Moncler sings like canary in China’s lux coal mine

18 Sep 2019

Boss Remo Ruffini’s statement of the obvious, that Hong Kong protests will dampen sales of its bling puff jackets, is a warning sign for rivals. With unrest deterring shopping-mad tourists, fully rebuilding on the mainland what’s been lost in the Fragrant Harbour will be tough.

Chinese consumers are deceptively perky

4 Sep 2019

Sales of athletic gear, appliances and such have kept growing at 7-10% in defiance of economic headwinds blowing more strongly. Tax cuts and rising property values are helping. Without such support, the likes of Tiffany, Haier and Yum China are likely to feel the slowdown’s pinch.

Hong Kong’s jittery shoppers are a bad omen

30 Aug 2019

Anti-government protests dragged retail sales down 11.4% in July. It’s an early measure of what unrest will cost an economy already on the edge of recession. After past crises like SARS, consumption recovered swiftly; a cooling China and other factors suggest this pain will last.

Western luxury brands’ China dilemma will worsen

14 Aug 2019

Givenchy, Swarovski and Versace have made grovelling apologies to Beijing for incorrectly implying Hong Kong is a country. The humility comes easily now. Abasement would become more painful, and costly, if China turns up the heat on the special administrative region’s protests.

Prada’s independence hinges on green millennials

31 Jul 2019

As creative guru Miuccia turns 70, the fashion brand’s stock sits 35% below its IPO price. To return there Prada needs Gucci’s sales growth and LVMH’s margins. Unless neophyte 31-year-old son Lorenzo’s renewables push enthuses his peers, it may not stay independent.

LVMH basks in hand-stitched luxury bubble

24 Jul 2019

The $220 bln French fashion-to-wine giant leads a platoon of increasingly pricey European bling stocks. Double-digit sales growth and a diverse business empire should help boss Bernard Arnault extend the run. Smaller peers may be the ones to watch for early signs of lost sparkle.

If only James Bond could rescue Aston Martin

24 Jul 2019

The $2.2 bln maker of 007’s legendary sports car is struggling. With the auto industry’s future in flux, once-reliable buyers like VW or Ford are no longer in the business of collecting trophy assets. Barring the odd billionaire, Aston looks destined to continue skidding out.

Richemont’s jewels overcome slower watches

18 Jul 2019

Protests in Hong Kong did enough damage to merit a mention as sales of timepieces, the 40 billion euro luxury group’s No.2 category, fell in the quarter to June. But jewellery and online channels helped produce 9% top-line growth, underlining the Swiss group's robust portfolio.

Sotheby’s bid a bad case of Pinault envy for Drahi

17 Jun 2019

Cable tycoon Patrick Drahi is buying the auction house for $3.7 bln at a 60% premium. Even with cost cuts, the financial prospects are humdrum. As with fellow French billionaire François-Henri Pinault’s purchase of Christie’s, the returns look more reputational than financial.

Skincare M&A craze enjoys anti-aging protection

7 Jun 2019

Charmed by niche brands’ fast growth and disruptive power, consumer groups like Unilever are paying up to snatch the next hot cream. Gleaning the true benefits of such splurges is hard. But a growing taste for toxic-free serums and a greying client base will offer rich fillers.

Rolex retail IPO can avoid fate of buyout castoffs

29 May 2019

Along with the internet, private equity has squeezed the life out of many high street chains. Apollo-owned Watches of Switzerland, which is eyeing a 660 mln pound float, may be the exception. A promising U.S. growth plan will help the bling purveyor justify its premium multiple.

Tisci’s medicine can ease Burberry’s China aches

16 May 2019

The UK fashion group reported static sales and sluggish growth in the People’s Republic. A strong reception for new designer Riccardo Tisci’s debut collections should reinvigorate sales. Burberry’s prediction of “broadly stable” revenue in the coming year may prove too cautious.

Bernard Arnault dances to Rihanna’s fashion tune

10 May 2019

The French billionaire is hooking up with the pop icon to launch a label for fancy clothes and bags. A repeat of Rihanna’s wildly popular Fenty cosmetics line would add just 1% to LVMH’s sales. Still, tapping into 70 mln Instagram fans is faster and cheaper than buying a brand.

Kering can stomach Gucci’s tax blow in Italy

9 May 2019

François-Henri Pinault’s maker of pricey sneakers and bags has agreed to pay Italy’s taxman 1.25 bln euros to atone for past sins. The fine is a stain on Gucci’s reputation. But parent Kering’s lean balance sheet means it can absorb the hit and still go after juicy M&A targets.

Chinese millennials create M&A urgency for Kering

18 Apr 2019

Gucci’s success, especially with the mainland’s young affluent, is a blessing and a curse for Francois-Henri Pinault’s luxury empire. The Italian brand accounts for 61 pct of sales. Finding another marque, like Valentino or Patek Philippe, to balance the business won’t come cheap.