Luxury Goods

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.

Notre-Dame melts France’s philanthropic froideur

16 Apr 2019

Luxury tycoon Bernard Arnault and oil giant Total are among those to have pledged a total of more than 600 mln euros to rebuild the fire-ravaged cathedral. France lags Germany and the UK for charitable giving. But restoring a national treasure makes moral and financial sense.

China’s art market paints a clearer picture

27 Mar 2019

Sales in the mainland and beyond dipped in 2018, to $13 bln. There was still exuberance: a monumental abstract triptych sold for a record $65 mln. But the mood ahead of Hong Kong’s Art Basel is subdued. For buyers, that may be good news, auguring less volatility and lower prices.

Outside eyes can quell EssilorLuxottica board row

13 Mar 2019

Top shareholder Leonardo Del Vecchio wants protégé Francesco Milleri to run the eyeglasses juggernaut. But he lacks both international experience and director support. A comprehensive, global search would turn up a better boss for the $50 bln group as it faces new challenges.

LVMH-Pernod bid talk makes for watery cocktail

4 Mar 2019

Ever since activist Elliott showed up at Pernod, Paris has been awash in speculation that LVMH covets the $46 bln spirits group. Adding booze brands like Absolut to its portfolio would dilute LVMH’s luxury profile. Bernard Arnault’s public disavowal of a deal is believable.

Time for Ted Baker to embrace overseas offers

4 Mar 2019

The UK fashion group’s founder Ray Kelvin has left amid an ongoing probe relating to his hugging of colleagues. With the shares down a third in a year and Kelvin still holding 35 pct, Ted Baker could be in play. Chinese luxury players eyeing mid-market brands may come calling.

Moncler’s strength will whet its M&A appetite

1 Mar 2019

The Italian puffer-jacket maker’s 2018 sales grew 18 percent year-on-year, disproving fears it might miss out on the recent spate of strong luxury results. Moncler could become an LVMH-style sector aggregator. A rising net cash position and share price give it greater firepower.

If Chanel were a normal company, it’d be in play

19 Feb 2019

The Parisian fashion house’s designer for 36 years, Karl Lagerfeld, has now died at 85. Its co-owners, two brothers, are approaching retirement. LVMH boss Bernard Arnault has the firepower to make a $40 bln purchase. Bankers may be salivating, but a deal looks a long way off.

China bling scare was healthy reality check

8 Feb 2019

Birkin bag maker Hermes reported strong fourth-quarter sales momentum in the Middle Kingdom, echoing rival LVMH and easing fears of a slump in Chinese demand that hit luxury shares last year. Yet valuations were probably too high. The correction is welcome.

Ferrari boss’s new positivity has a downside

31 Jan 2019

Louis Camilleri sent the carmaker’s shares up 12 percent by pledging to hit a 2020 target in 2019. Investors spooked by his cautious driving when he took over last summer will be cheered. But the more the outlook chops and changes, the more investors will discount its durability.

LVMH and peers have a suitably high-quality issue

30 Jan 2019

The top four makers of luxury bags and watches could wind up with 12 bln euros of net cash by 2020. If they gear up to manageable levels, they’d have a 40 bln euro war chest. So far, so good – except investors might start to complain if it’s not used for M&A or returned to them.