Luxury Goods

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.

Italy puts luxury tag on discount Kering tax claim

28 Jan 2019

Authorities are seeking 1.4 bln euros of back taxes from the French-based owner of Gucci. That’s 60 percent of the company’s total bill between 2011 and 2017. Italy may have a case for questioning activity from Kering’s Swiss logistics unit. Yet the claim looks too big.

Burberry’s hopes rest on new designer’s magic

23 Jan 2019

The British fashion house eked out 1 pct growth in same-store sales last quarter, worse than luxury rivals. A looming hard Brexit could also be a massive headache. The weak results mean the group badly needs 44-year-old Riccardo Tisci’s debut collection to be a hit.

L’Occitane picks odd time to bet on British beauty

14 Jan 2019

The Hong Kong-listed soap and hand cream brand has snapped up luxury skincare group Elemis for $900 mln in cash. At over 22 times last year’s EBITDA, the price looks a tad rich. The acquisition will also boost L’Occitane’s exposure to the UK at a time of economic uncertainty.

Yellow vests will hit Richemont rivals harder

11 Jan 2019

The Cartier owner said last year’s French protests were partly to blame for slowing organic growth. But Hermes and LVMH are more exposed to France, which brings in just 6 percent of Richemont’s revenue. Weakness in Hong Kong is a bigger worry for the $35 billion watchmaker.

French squeeze-out plans may tempt Arnault on Dior

7 Jan 2019

Paris wants to ease buyouts by cutting to 90 pct the bar for forcing out minorities. The new rules, along with a dip in luxury stocks, can revive the magnate’s interest in taking Christian Dior private. There’s no urgency for a leaner structure. But the bill may rise.

Italy’s woes could spell LVMH moment for Moncler

2 Jan 2019

Italian luxury brands have so far resisted becoming conglomerates like the French behemoth and rival Kering. But generational shifts by founders, combined with an aversion to political risk by global investors, may afford Moncler boss Remo Ruffini his opportunity to change that.

LVMH pays luxury price to check into Belmond

14 Dec 2018

Bernard Arnault’s champagne-to-handbags group is spending $3.2 bln including debt on the owner of Venice’s Cipriani. The multiple of 19 times expected EBITDA is as punchy as a Belmond suite. The French group will need all its limited hotel experience to make the deal work.

Tiffany stumbles in luxury game of catch

28 Nov 2018

The luxury jewelry store reported a surprise slowdown in sales driven by all-important Chinese tourists. They’re still buying, just doing so at home. Currency changes and tariffs are partly to blame. Rivals have tripped by chasing tourist flows, but Tiffany is right to resist that urge.

Aston Martin faces winding road to IPO promises

15 Nov 2018

The luxury-car maker’s third-quarter sales almost doubled from a year earlier, but its hoped-for 30 pct EBITDA margin remains distant. The risk of a chaotic Brexit that would hurt production and sales is an added concern. The shares, down a fifth since listing, will languish.