Luxury Goods

Puma spinoff helps Kering’s race-fitness

11 Jan 2018

Gucci’s parent will hand investors most of its stake in the German sports label, a distribution worth 3.5 bln euros. Offloading the lower-end brand should boost the 52 bln euro luxury group’s value. Kering may even be able to leave behind its traditional discount to rival LVMH.

Burberry’s upward mobility has limits

9 Jan 2018

The 7.5 bln pound British brand hopes a move upmarket will boost its low operating margins. Gucci, for one, turned itself around by ending most discounts and investing in stores. Burberry is priced to succeed, but a less profitable product mix could be a check on its ambitions.

Burberry’s risky new look rules out missteps

9 Nov 2017

CEO Marco Gobbetti’s plans to take the UK brand upmarket mean no sales or operating margin growth until 2020. Investors who lopped 1 bln pounds off Burberry’s market value will now be unforgiving. Only perfect execution and the right new designer can prevent a further slide.

Burberry can lose kid gloves along with Bailey

31 Oct 2017

Designer Christopher Bailey is leaving the British fashion brand after 17 years. It has taken the company three years to unpick the deferential 2014 decision to hand him the CEO role. His exit gives new boss Marco Gobbetti a freer hand to implement much-needed turnaround plans.

Time for Kering to hang up its boots at Puma

24 Oct 2017

The sneaker maker has been a poor investment for the fashion group and sullies its luxury image. Puma’s recovery could let Kering get out without a loss, even if finding buyers looks tricky. Spinning off the 5 billion-euro unit would be easier, and leave less cash to squander.

Coach name-change is more than a fashion statement

12 Oct 2017

The New York luxury handbag maker changed its corporate name to Tapestry. Expensive rebrands can help companies distance themselves from past scandal or capitalise on investor mania for certain industries. Coach’s new identity signals a more acquisitive future to shareholders.

Da Vinci bragging rights going cheap at $100 mln

11 Oct 2017

That’s the estimate on the only Leonardo painting today’s billionaires will ever be able to bid for. It’ll attract collectors and lovers of scarcity and quality, and perhaps science geeks: the pre-auction tour includes San Francisco. The old master could easily set a new bar.

Nestlé’s L’Oréal stake is ready for a makeover

22 Sep 2017

The head of French cosmetic group’s founding family, Liliane Bettencourt, has died, reviving the debate about the Nescafé owner’s 23 pct stake. The best solution is to offload it. The challenge for Nestlé boss Ulf Mark Schneider is how to distribute 24 billion euros of value.

Chinese online retailer sits in lap of IPO luxury

21 Sep 2017

Secoo has carved out a nice niche, selling upscale brands such as Tod's and Versace. Its customer base is small, though, and the firm is burning cash. Even so, impressive order sizes and a clean image make it a tempting target for counterfeit-fighting Alibaba and mass-market JD.

Paris fashion IPO will struggle for luxe valuation

18 Sep 2017

SMCP, the French owner of the Sandro and Maje labels, is planning a listing. Pitched between luxury and the high street, the Chinese-owned group has sales growth and an efficient supply chain to rival retail leader Zara. But its smaller size and high debt will weigh on its worth.

Samsonite luggage could travel more

24 Aug 2017

The world's largest luggage-maker reported flat earnings in the first half, as it digests a big acquisition. Alone among fashion stocks, Samsonite offers a unique pure play on travel. But for all its globe-trotting image, it looks over-dependent on American demand.

Gucci gives luxury an eye-catching makeover

27 Jul 2017

Operating profit at Kering, the Italian brand’s 39 bln euro parent, rose 57 pct in the first half of 2017. The catwalk-worthy performance avoided discounting or the sector’s old trick of opening new stores. Until rivals can copy it, they will envy the French group’s look.

LVMH’s only bad look is a now-fashionable euro

27 Jul 2017

Operating profit at the Louis Vuitton owner jumped 23 percent in the first half. The French group’s lucrative clothing and handbag division last performed this strongly during China’s shopping frenzy in 2011. Europe’s strengthening currency could yet cramp the company’s style.

Jimmy Choo buyout could blister the brand

25 Jul 2017

U.S. label Michael Kors is paying $1.2 billion for the luxury shoemaker. Three nimble steps are necessary to justify that price: supercharge sales, improve margins and find synergies. The buyer’s track record shows that is achievable, but at risk of taking Choo downmarket.

A trend for Burberry to copy: focus on margin

12 Jul 2017

The British brand had a good first quarter and is on track to deliver planned cost cuts. That still leaves new boss Marco Gobbetti with plenty to do to rebuild investors’ confidence. A good option would be to follow Saint Laurent’s lead and set a firm operating margin target.

Shanghai Tang sale pushes against M&A current

4 Jul 2017

An Italian textile maker has purchased the China-inspired fashion brand from luxury giant Richemont. The deal is at odds with the image of wealthy mainland buyers snapping up cash-strapped European brands. But Shanghai Tang was never very Chinese, and that's the problem.

Remy’s new elitism delivers both riches and risk

8 Jun 2017

The cognac maker’s full-year operating profit grew 27 percent as China and the U.S. rebounded. A push for higher-spending customers, including a Beijing boutique, should lift margins. But chasing a luxury image brings the kind of volatility that got Remy into trouble in the past.

Complex pay ties British companies in knots

7 Jun 2017

Tesco paid boss Dave Lewis a 142,000 pound allowance to move closer to work, while Burberry’s Christopher Bailey got a big share award at a delicate time. Both controversies are a distraction. If they kept pay simple, companies and investors could focus on more pressing issues.

Art world upstart sprays tech fortune on canvas

2 Jun 2017

Japan's Yusaku Maezawa is building a collection of Basquiats and other masterpieces. The soaring value of his fashion portal vividly illustrates how investors are enchanted by the tech industry’s fast growth and fat margins. It also means he can afford to paint the town red.

Richemont’s downsizing is worth copying

12 May 2017

The Swiss luxury watchmaker’s full-year sales disappointed and margins are now touching financial crisis lows. At least chair Johann Rupert has recognised the need to shrink. It’s an example that others like Prada would do well to follow.