Luxury Goods

Capital Calls: Walmart, HelloFresh

16 Nov 2023

Concise views on global finance: Although the US retailer lost nearly 8% of its market value after it indicated that price increases are starting to ease, it should be able to navigate the challenge; the 2.7 billion euro meal-delivery company has become a tasty buyout target.

Farfetch turns from Richemont blessing to curse

9 Nov 2023

The $65 bln Cartier-owner hoped to fix a problem by flogging part of digital arm YNAP to the US-listed marketplace in a stock deal that involves extending $450 mln in credit. But Farfetch’s stock has dived and its finances are stretched. Its woes risk infecting the bling giant.

Capital Calls: Aston Martin

1 Nov 2023

Concise views on global finance: The marque favoured by James Bond has lost 50% of its value since a capital increase three months ago.

Kering’s woes are tip of melting luxury iceberg

25 Oct 2023

Sales at Gucci’s $54 bln owner plunged 9% last quarter. Inflation suppressed less affluent shoppers’ appetite for its products and geopolitical risks are clouding its most coveted market - China. While a complex turnaround ups Kering’s challenge, bling rivals are also vulnerable.

Capital Calls: Birkenstock flop

11 Oct 2023

Concise views on global finance: The sandal maker took a tumble, as its shares opened more than 10% below the IPO price, leaving questions about its venue and valuation.

Capital Calls: Pelululemon

28 Sep 2023

Concise views on global finance: The apparel firm and the exercise-bike maker have entered into a five-year partnership, ending a costly feud. For Lululemon, it removes the risk of an outright acquisition. Peloton gains a valuable partner, but still faces an uphill climb.

Coty’s listing treatment is just cosmetic

26 Sep 2023

The $10 bln US-traded beauty firm is going against the tide with a dual listing in Paris. That may give it more visibility with European investors and the funds will cut its debt. But it won’t reduce the risk of its luxury clients boosting their own cosmetic and perfume arms.

Pinault’s Hollywood foray is untimely distraction

8 Sep 2023

The French tycoon will buy a majority stake in talent agency CAA, valued at $7 bln. The Tinseltown escapade offers diversification from luxury giant Kering. But it may complicate CEO François-Henri Pinault’s attempt to revive star brand Gucci while digesting other large deals.

Reese Witherspoon tries to make deal stars align

6 Sep 2023

The “Wild” actor is selling 70% of her Draper James clothing line, two years after Blackstone backed a buyout of her media firm. George Clooney and Dr. Dre showcase the allure of celeb brands, but ones involving Jessica Simpson and Jessica Alba turned fame to financial shame.

Body Shop sale may give Natura skin-deep makeover

30 Aug 2023

After offloading Aesop for top dollars, the Brazilian beauty giant may struggle to fetch the cosmetics brand’s original $1 bln price tag in a sale. The M&A spree reversal will simplify Natura’s structure. But sprucing up its surviving Avon arm and other labels looks hard.

US retailers lace up for battle on two fronts

25 Aug 2023

Shares in retailers like Foot Locker and Macy's have tumbled this week after unveiling dim outlooks. Price-conscious consumers are part of the problem, but others, like Dick’s Sporting Goods, are also citing theft. Both are big issues, and neither looks to be improving.

Rolex’s deal is ticking time bomb for retailers

25 Aug 2023

Shares of Watches of Switzerland slumped 28% after the timepiece-maker bought retail chain Bucherer. The fear is that the luxury group wants to sell directly to consumers. Building a store network won’t be quick but WoS’s business model, and its independence, are under threat.

Italy faces bumpy round trip on the Silk Road

23 Aug 2023

Prime Minister Giorgia Meloni may quit Chinese President Xi Jinping’s infrastructure club. Like other European fans, Italy gained little economic benefit from signing up to the Belt and Road Initiative. Yet leaving may provoke retaliation, perhaps against its luxury industry.

‘Lipstick effect’ boosts beauty’s resilience

15 Aug 2023

Despite rising inflation and sluggish spending, beauty and skincare have bucked the trends dragging on other parts of retail. Tarang Amin, CEO of e.l.f. Beauty, explains in this Exchange podcast how the $400 bln-plus segment can survive economic hardship.

Coach and Michael Kors design a raggedy ensemble

10 Aug 2023

Tapestry’s $8.5 bln purchase of Capri would unite the luxury brands and could help it defend share against European giants like LVMH. Adding 8 times the buyer’s debt load to juggle a big turnaround while maintaining a squeaky-clean credit rating looks less prudent.

US luxury brands strut down a narrow catwalk

3 Aug 2023

Fashion houses like Ralph Lauren and Michael Kors have lost market share to higher-end European rivals as the spending gap between wealthy shoppers and the aspiring rich widens. A quicker pivot to Asia or M&A may help offset a US consumer squeeze. Neither are easy solutions.

Kering dons Valentino scent to ease Gucci malaise

28 Jul 2023

The $72 bln luxury giant is buying 30% of the Italian fashion house for 1.7 bln euros. The premium price reflects François-Henri Pinault’s need to cut its reliance on tottering star brand Gucci. Yet Valentino is much smaller, and its acquirer may not own it in full until 2028.

Capital Calls: LVMH’s US dip, Rolls-Royce revival

26 Jul 2023

Concise views on global finance: Shares in the 413 bln euro luxury conglomerate fell 4% as investors fretted about weakness in its once booming US business; the UK airplane engine maker raised its profit forecast for 2023 as its new CEO benefits from travel tailwinds.

Capital Calls: Netflix, Thailand

20 Jul 2023

Concise views on global finance: The streaming giant warned its revenue will fall short of Wall Street’s expectations; a court’s move to suspend the leader of the election-winning Move Forward Party as a lawmaker raises the stakes in the underperforming $500 bln economy.

Kering’s beauty drive has flashy precedent

12 Jul 2023

François-Henri Pinault paid $4 bln for upmarket perfumes brand Creed, says the FT. At 23 times EBITDA, the deal isn’t cheap but high margins and rapid growth mean it should pay off. It may also allow Kering to fully control its scent business, a gamble that worked with eyewear.