|Bid||2,107.00 x 0|
|Ask||2,108.00 x 0|
|Day's Range||2,091.00 - 2,131.00|
|52 Week Range||1,618.50 - 2,362.00|
|Beta (3Y Monthly)||0.57|
|PE Ratio (TTM)||24.33|
|Earnings Date||Nov 14, 2019|
|Forward Dividend & Yield||0.43 (2.09%)|
|1y Target Est||1,915.22|
(Bloomberg Opinion) -- Moncler SpA’s hotline just blinged. The brand, sported by Drake in his video for the popular song of that name, is being courted by Kering SA, according to Bloomberg News.Moncler has been a fashion-hit maker itself. If Francois-Henri Pinault’s Kering wants to get its hands on it, the Gucci owner will have to pay a price as rich as that commanded by one of its $1,000-plus down jackets.The Italian brand, with a market capitalization of 11 billion euros ($12.2 billion), would bring a sizable name that’s still capable of growth to Kering, valued at 69 billion euros. It would also usefully reduce the French group’s reliance on Gucci, which now accounts for more than 60% of group sales and 80% of operating profit.Moncler has scope to add further stores, particularly flagship locations, in China. While it has successfully expanded its range of products from its core down jackets into knitwear, there is an opportunity in bags and accessories. Kering’s expertise would bolster these ambitions. Digital marketing skills and the French company’s focus on sustainability could be useful too, as younger luxury buyers’ concerns about natural resources, such as down and fur, shape their buying habits.But Moncler won’t come cheap. Assuming a 25% premium over Wednesday’s closing price, a takeover would cost about 12 billion euros, adjusting for estimated net cash of 550 million euros. That equates to about 20.5 times this year’s likely Ebitda, exceeding the multiple that Kering’s French arch-rival LVMH has offered for the iconic diamond and jewelry brand Tiffany & Co.With Moncler forecast to make about 750 million euros of operating profit in 2023, the returns from a deal would be a mere 5% after tax, unless Kering could turbocharge the business. Given that the target is already well run under Remo Ruffini, its chief executive officer and biggest shareholder, that looks like a tall order. Moncler's operating margin is already strong at about 30%.This wouldn’t be a case of taking a tired brand and rejuvenating it. So the pressure would be on Kering to engineer ways of achieving higher sales in order to earn returns at closer to the 7%-8% level that would make a deal easier to justify.The French house can afford Moncler. Assuming an all-cash deal, net debt would increase from 0.4 times Ebitda to 2.4 times. That’s manageable. Kering also has a 16% stake in sportswear maker Puma SE, worth about 1.6 billion euros, to play with. But a deal would wrap up much of Kering’s acquisition firepower up in a puffer jacket, leaving little room to expand into other areas, such as jewelry.There is better value to be found elsewhere, for example in Britain’s Burberry Group Plc, whose recovery plan has yet to pay off. Kering could also bring the skills it used to reinvigorate the Gucci brand to Prada SpA or Salvatore Ferragamo SpA. While this could mean more upfront investment, there is a much bigger turnaround potential.Although Burberry has no controlling family, Prada and Ferragamo do. So far, they have shown no indications of wanting to sell. A reshuffle of Moncler’s ownership recently reduced Ruffini’s stake to 22.5%Even so, Moncler’s down jackets are best known for keeping out the cold. The company has plenty to help it repel a predator, or more likely, make them pay a bulky price.\--With assistance from Chris Hughes.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Investors in Burberry Group plc (LON:BRBY) had a good week, as its shares rose 5.3% to close at UK£21.52 following the...
Burberry said it will open a so-called "social retail" store in Shenzhen in China's technology hub powered by Tencent technology in the first half of next year that will blend retail and social media to create digital and physical spaces aimed at attracting customers. Few other details were given.
(Bloomberg Opinion) -- Burberry Group Plc’s last catwalk show in September, where models strutted in front of giant space-age speakers, was called Evolution.That’s just what the group delivered on Thursday. Sales held up despite the ongoing disruption in Hong Kong. And Burberry maintained its guidance for the current financial year for broadly stable sales and operating margin.That’s a relief for shareholders who had feared the turmoil would derail Burberry’s nascent turnaround under new designer Riccardo Tisci. The shares rose as much as 9%.That reaction looks overdone.Hong Kong is having an impact on Burberry. First-half sales there declined by a percentage in the double digits. The group estimated that the region now accounts for about 5% of total sales, compared with 8% previously.There will also be an impact on the gross margin — the difference between the price that retailers buy and sell their stock. The group had expected this to decline by 1 percentage point as it invested in product quality and cleared items that were designed before Tisci’s arrival. The turmoil in Hong Kong, which has hit tourist spending and forced Burberry to temporarily close stores, will mean that gross margins decline by 1.5 percentage points.However, this should be offset by factors including cost savings, with the company forecasting efficiencies of 120 million pounds ($154 million) by the end of this financial year.Burberry says it’s factoring an ongoing decline in Hong Kong into its expectations. But the violence there appears to be escalating. That doesn’t bode well for the coming months, and particularly the run up to the crucial Chinese New Year period. And let’s not forget the risks to Chinese demand from simmering trade tensions and worries about a U.S. recession next year. Tisci’s designs do appear to be gaining traction. Same store sales rose by 4% in the first quarter, but this accelerated to 5% in the three months to Sept. 28, commendable given the situation in Hong Kong. The company’s hoping to generate more demand for its fashions in China by teaming up with internet giant Tencent Holdings Ltd. to experiment with creating new stores that connect consumers online lives to their physical retail experience.As well as finding favor with young Chinese shoppers, Burberry says its new styles, particularly menswear, are appealing to domestic U.K. customers. That’s crucial in developing a broad-based recovery.But sales of accessories fell 5% excluding currency movements in the first half. Burberry blamed that on a lack of demand for the old styles, with a vast improvement in the appetite for Tisci’s designs.Yet bags is a key area where Burberry must win, and it’s seems increasingly clear that reviving this category will take time.What’s more, as I have noted, while Tisci’s designs are adorning celebrities, there doesn’t seem to be the buzz around Burberry as in the early stages of Gucci’s turnaround. The Italian designer’s new products represent about 70% of the range in stores now. That will increase to 80% by the end of March, which will provide a better read of his success.Before Thursday’s update, Burberry shares had sold off since July, although they recovered over the past month, as rival luxury groups posted resilient third-quarter sales.Still on a price-to-earnings basis, they trade at about 23 times, compared with about 24 times for the Bloomberg Intelligence luxury peer group.Until the group demonstrates that Tisci can deliver a revolution at the British luxury brand, that discount looks deserved.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
European stocks slipped on Thursday on concern over the state of U.S.-China trade talks as data showed a stagnating economy in Germany.
The company cut its gross margin view to fiscal 2020, saying it now expects a 150-basis-point decline, from a 100-basis-point decline previously, as it continues to see disruptions in the higher-margin Hong Kong market.
Investing.com -- Here is a rundown of regulatory news releases from the London Stock Exchange on Thursday, 14th November. Please refresh for updates.
(Bloomberg Opinion) -- It’s now easier than ever to get your hands on a used Louis Vuitton tote or Gucci belt bag for cheap. But the rise of the online resale market in luxury goods needn’t have executives of high-end fashion houses shaking in their Christian Louboutin boots.In fact, it’s a model that could actually help an industry that thrives on scarcity and exclusivity, especially if designers use this emerging channel to their advantage.One reason is that the growth of the luxury resale market, popularized by such sites as the RealReal Inc., Poshmark and Vestiaire Collective, is poised to outstrip that of the broader market. The Boston Consulting Group and Altagamma estimate that it will expand by an average of 12% per year through 2021, compared to about 3% for the primary luxury market.While prices on the resale market tend to be lower than retail, they’re not so much lower that they appeal to a totally different customer. Jamie Merriman, an analyst at Bernstein, found that the median price of a Louis Vuitton bag on The RealReal was $1,025. That’s a deal compared to the median $3,000 price her analysis found for new Louis Vuitton purses. But that still leaves the brand in a vastly different tier than, say, Coach or Michael Kors, whose new bags might cost $300 to $400. (It’s near enough that it may tempt some shoppers to trade up — but that’s only a worry for accessible luxury brands.)In some cases, the prices fetched on the secondhand market might only add to a label’s mystique and cachet. Rare Hermés Birkin bags can sell on sites such as RealReal for higher prices than new ones do.Perhaps more important, though, is the way that secondhand sites can change the calculus of buying a new luxury piece in the first place. Say you’re considering a classic Balenciaga City bag for about $2,000. Is it worth the investment? A scroll around RealReal shows that you might be able to resell it for about $600. That could be exactly the kind of assurance a first-time millennial or Generation Z luxury buyer needs to take the plunge on a pricey accessory. None of this is to say that the luxury powerhouses shouldn’t get into the burgeoning resale market themselves. Some already are. At A.P.C., a French fashion house, customers can apply to trade in their worn jeans. If accepted, they can buy a new pair at half price. (The old jeans are then resold, but not before they have been washed, repaired and marked with the initials of the former owners.)Another option would be to acquire secondhand platforms, as Cie Financiere Richemont SA did with Watchfinder last year. But this could create challenges, particularly when it comes to authenticating other brands’ products. That’s why cooperation between luxury brands and resale sites looks like the more likely and logical approach.Burberry Group Plc, has begun a partnership with the RealReal in which U.S. customers who consign its goods can get a personal shopping session and tea at one of its boutiques. In Europe, Vestiaire Collective has a tie-up with French contemporary brands including Sandro and Maje, owned by SMCP SA, under which customers selling these retailers’ products are rewarded with a 10 euro voucher to spend on their new collections.Such relationships allow the brands themselves to engage with shoppers who are participating in the secondhand market. They also allow these companies to market themselves as champions of sustainability and recycling.Luxury adviser Mario Ortelli of Ortelli & Co. says cooperation between fashion houses and secondhand sites could run even deeper as the market develops. Brands could play a bigger role in authenticating their products for resellers, for example. Another idea: Fashion labels could use data from resale sites to inform their merchandising decisions.So there is good reason for the luxury giants to play nice with the resale sites right now — but they should be clear-eyed about the possibility that industry dynamics may eventually change. If these startups end up struggling to keep counterfeit products off their marketplaces, for instance, that would be a reason for the luxury brands to distance themselves. For now, however, the big bling empires shouldn’t fear their handbags and dresses getting a second life.To contact the authors of this story: Sarah Halzack at email@example.comAndrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: Michael Newman at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...
When Burberry Group plc (LSE:BRBY) announced its most recent earnings (30 March 2019), I compared it against two...
(Bloomberg Opinion) -- “Flygskam” (or flight shame) has made some people too embarrassed to fly because of the damage to the planet. Might fashion be the next business to suffer as consumers put on their environmental hair shirts?Bernard Arnault, chairman of luxury behemoth LVMH Moet Hennessy Louis Vuitton SE, has criticized the 16-year-old climate activist Greta Thunberg as being “demoralizing for young people.” She’s probably a bit of a downer for him too.Arnault’s business depends on shoppers, especially young ones, buying lots of unnecessary stuff, from Christian Dior saddlebags to expensive lipsticks from the pop star Rihanna’s Fenty range. Fretting about an impending environmental catastrophe, and worrying that your purchases are contributing to it, is hardly conducive to a spot of retail therapy.The clothing and footwear industries (of which luxury is only a part) contribute about 8% of global C02 emissions, according to Quantis, an environmental consultancy. The Ellen MacArthur foundation, a non-profit organization, estimates that the textiles business generated more greenhouse gas emissions in 2015 than all international flights and shipping combined. There’s plenty here to infuriate Thunberg.Reliable data on the luxury industry’s environmental performance isn’t easy to come by, but one group (made up of Global Fashion Agenda, an industry forum, the Sustainable Apparel Coalition and the Boston Consulting Group) has had a go at creating at a scorecard. This “Pulse Score” is based on elements such as the ecological smartness of product design, raw material use and manufacturing processes. Getting 100 would be perfection on sustainability; nobody comes close to that.Overall, fashion had a pretty underwhelming score of 42 out of 100, although the big luxury companies scored a slightly more respectable 54. While this isn’t exactly cause to celebrate, it does show that the financial clout of LVMH — and its big peers such as Gucci-owning Kering SA and Switzerland’s Compagnie Financiere Richemont SA (home to Cartier) — might be an advantage when it comes to trying to mitigate their impact on the planet and its resources.Yet one can’t ignore the scale of that industry impact. The luxury goods makers have enjoyed more than three years of blockbuster growth, driven largely by Chinese shoppers, meaning they’re gobbling up more natural resources than ever. And as the chart below shows, the natural materials favored by the fashionable elite have the worst effect on the environment (silk is a particular disaster). None of this is helped by the wasteful practices of many shoppers, who move on quickly to the next hot design, or indeed some of the companies. Britain’s Burberry Group Plc came under justified fire last year for its now abandoned practice of destroying unsold stock to prevent it being sold off cheaply.Kering, founded by Arnault’s great rival Francois Pinault, does at least try to be transparent about the damage it does. It publishes an environmental profit and loss account, which put the cost of its impact on the planet in 2018 at about 500 million euros ($549 million). It estimates that about three-quarters of this came from raw materials processing and production. Still, while it’s honest of them to publish these data, the harm is still being done.LVMH has kept a lower profile, though it does perform well on one measure. Morgan Stanley analysts say that the more a luxury company does its own manufacturing, the better it performs on environmental, social and governance targets. That’s because some of the worst industry practices happen in the supply chain away from the direct control — and responsibility — of the parent. The LVMH brands rank well on this measure, according to the Morgan Stanley research. Three of its brands (Loro Piana, Louis Vuitton and Christian Dior) do most of their own manufacturing.As Arnault’s attack on Thunberg highlighted, there’s a reason why these companies are trying to mend their ways: younger shoppers, including Chinese ones, are demanding it. In 2018 all of the industry’s growth came from the under-40s, according to consultants at Bain & Company. Those consumers are more likely to be loyal to brands with a conscience. Yet no matter how much attention the industry pays to the planet, this business is still about getting people to spend money on stuff they could live without. If the rich can be shamed into giving up their far-flung holidays, what does the future hold for Gucci’s diamond belt?\--With assistance from Elaine He and Lara Williams.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Apple Inc. has been renovating its iconic store on Manhattan’s Fifth Avenue for almost three years, and when it opens to the public on Friday customers will likely notice new aesthetics, including 20-foot trees, plant walls and skylights that bring daylight into the subterranean space. But the most popular change may well be two new entrances, subtly placed on the north and south side of the store across the street from the Plaza Hotel.Easing egress is a tacit nod to complaints that Apple’s stores had become hard to shop because they’re busy and difficult to navigate thanks to the competing needs of shoppers looking to hang out, get their gadgets fixed or actually buy something. Now locals and mission shoppers can come and go without having to deal with throngs of tourists flowing through the glass cube entrance that made the store a retail landmark and one of Apple’s busiest.The company more than doubled the size of the service area, what it calls the Genius Bar. That addresses another critique -- that getting help in an Apple store can take a long time. The renovation also almost doubled the size of the space, adding rooms where customers can test out products such as the HomePod smart speaker and small businesses can get advice on how best to kit out their offices.The Fifth Avenue location’s reopening was timed to coincide with the launch of several new products, including the iPhone 11 and Apple Watch Series 5 that debut on Friday.Earlier this year, veteran Apple executive Deirdre O’Brien replaced Angela Ahrendts as retail chief. Ahrendts, who previously ran Burberry, brought a luxury world perspective to Apple and was criticized for turning the stores into branding exercises rather than places to shop and get service. O’Brien, who also runs human resources, worked on the team that opened the first Apple store in 2001.“Deirdre has a deep understanding of the stores,” a former Apple executive told Bloomberg earlier this year. “She’s just never been the face of them.”\--With assistance from Mark Gurman.To contact the reporter on this story: Matt Townsend in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Robin Ajello at email@example.com, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.