|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||817.00 - 828.80|
|52 Week Range||516.00 - 828.80|
|Beta (5Y Monthly)||0.49|
|PE Ratio (TTM)||78.16|
|Forward Dividend & Yield||4.55 (0.55%)|
|Ex-Dividend Date||Apr 28, 2020|
|1y Target Est||N/A|
(Bloomberg Opinion) -- One takeaway from the third-quarter earnings we’ve seen so far is that consumers are still spending — and they’re reaching for big, well-known brands for everything from food to face cream. This has played out most dramatically in high-end retail, where in some cases wealthy shoppers are buying more expensive goods than they were a year ago.There are a few reasons why this may be. As I have noted, some of the spending is coming from savings accumulated during lockdown, and affluent consumers want to get the most bang for their buck. If they’re reaching outside their regular price range or making their first luxury purchase, that often means shelling out for a household name: Louis Vuitton, Christian Dior or Hermes — all of which have seen strong sales recoveries.It also helps that the biggest companies — LVMH Moet Hennessy Louis Vuitton SE, Hermes International, Cie Financiere Richemont SA and Gucci-owner Kering SA — have the resources to make their brands stand out in a crowded market. They can afford to double down on social media campaigns. Meanwhile, consumers want tried and tested styles, whether that’s a Hermes Birkin bag or a Moncler puffer jacket. With fewer occasions to dress up, as well as an increasing awareness of fashion’s environmental costs, shoppers may decide to buy less, but buy better.All of this favors luxury houses steeped in heritage, such as Hermes, the first high-end group to return to sales growth in the third quarter. The handbag maker was also helped by the fact that it’s less dependent on tourist spending, which accounts for about 20% of sales globally, than its competitors, which see 30% to 35% of sales come from tourists, according to Thomas Chauvet, luxury analyst at Citi.But the shift in demand from cutting-edge to classic may be more of a challenge for Gucci, where sales excluding currency movements fell 8.9% in the third quarter. Its flamboyant aesthetic has won a strong following among younger customers. But it’s now toning down its ostentatious styles to adapt to more conservative tastes.Shoppers reaching for the familiar also creates particular challenges for smaller companies. Given the power of the luxury conglomerates and muscular single-brand groups such as Moncler SpA, there may now be more pressure to sell out to them.Salvatore Ferragamo SpA, for example, hasn’t reported its third-quarter sales yet, but the Italian house’s turnaround efforts have been disrupted by the pandemic. Investors will be watching to see whether Ferragamo and other companies seeking to revive their fortunes, such as Burberry Group Plc, are similarly lifted by the rising luxury tide. Ferragamo denied this week that it held talks with investors over a potential stake sale. But the family-controlled group would be wise not to turn its back on any options. The strides that the mega-brands have made this year will make it harder for smaller houses to gain traction with the wealthiest shoppers, even as a strong recovery in demand for luxury is expected in 2021. Of course, there is a possibility that consumer tastes pivot back toward experimentation when the world returns to some semblance of normality. But that future seems far away and far from certain. Even if shoppers do want less familiar, more edgy designs, companies will need to reach them online and through social media channels. Having the best retail locations and hottest designers will also remain crucial. That means continued investment for all groups, big and small.If life continues to get tougher for more niche brands, the next hot trend in luxury could be a shakeup of industry ownership.This 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/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Shares in Hermès International rose more than 2% on Thursday, after the French luxury group returned to growth as consumers started buying its products again, including its iconic Birkin bags.
(Bloomberg Opinion) -- Of all the world’s billionaires, with the exception of those from China, it is the French who have just enjoyed their most lucrative decade, according to a new UBS/PwC study.LVMH Moet Hennessy Louis Vuitton SE boss Bernard Arnault and his ilk saw their wealth balloon more than fivefold to $443 billion between 2009 and mid-2020, fueled by Asian hunger for French-branded luxury goods and a global real-estate boom fanned by low interest rates. France is the land of what writer Pascal Bruckner calls “Bolshevism-lite,” where wealth is publicly hated but privately hoarded.While the Covid-19 pandemic looks like the start of an altogether less bright decade, the rich are unlikely to let this crisis go to waste.There are new Darwinist divides in the corporate world exposing a kind of gilded inequality at the top of society. Soaring tech businesses can shrug off social distancing while old-school brick-and-mortar firms can’t. Arnault’s fortune year-to-date has fallen by $19 billion as tourism and shopping take a beating, though he remains the fifth-richest man in the world, according to Bloomberg data. L’Oreal SA’s Francoise Bettencourt Meyers now faces stiff competition for her title as the world’s richest woman from Mackenzie Scott, Jeff Bezos’s ex-wife.In France, the coronavirus crisis has prompted the ultra-wealthy to wake up to the need to pitch in more, even in a country where American-style philanthropy is usually viewed as the job of the state. Hermes International donated 20 million euros ($24 million) to Paris’s hospital association in May; LVMH gave ventilators and manufactured masks. The glare of public opinion can’t be so easily ignored, as the backlash over billionaire donations to help rebuild Notre-Dame Cathedral last year showed.In this dog-eat-dog world, every small corporate victory counts. Arnault’s most visible bout of Covid-19 opportunism has been to try to walk away from LVMH’s mammoth $16 billion takeover of U.S. jeweler Tiffany & Co. after a drop in the target’s share price. Even if he fails, he will have bought time. Elsewhere, the plunging value of Altice Europe, the vehicle of telecoms mogul Patrick Drahi, led to the Franco-Israeli billionaire’s offer to take it private at an opportunistically low price of 2.5 billion euros. He faced the howls of minority shareholders.The current climate is even offering tycoons the perfect chance to acquire more power and influence via Lagardere SCA, the once-mighty industrial conglomerate that has suffered mixed fortunes as a media-and-retail play under the family heir Arnaud Lagardere.With the company under pressure from activist Amber Capital, France’s billionaires lined up to take a position: Vivendi SA’s Vincent Bollore, Marc Ladreit de Lacharriere and LVMH’s Arnault all bought shares recently, almost doubling Lagardere’s share price in the process. While at first it looked like a defensive whip-round to help Arnaud Lagardere, it’s now increasingly clear that Arnault and Bollore are in a face-off for control. The prize they’re all after? The company owns the grandaddy of glossy magazines, Paris Match, book publisher Hachette and politically influential radio and newspaper brands.Billionaires have always been attracted to media titles, and they already have plenty of sway with President Emmanuel Macron. But the once-in-a-generation profit opportunity of the pandemic comes in the run-up to France’s presidential election in 2022.This all might seem rather quaint compared to the space ambitions of Jeff Bezos and Elon Musk. France’s increasingly Jurassic jet set prefer radio brands to rockets. But that’s partly because the world is getting smaller for all aspiring Parisian elites. If things didn’t work out at home, they might once have dreamed of prop-trading in the City of London or launching a start-up in Silicon Valley. But globe-trotting across borders no longer looks quite such a sure thing. The future of French wealth lies in France, and not on Mars.This isn’t just a French phenomenon: Of all the business and investment strategies being pursued by the world’s billionaires, the least popular is to relocate to another country, according to UBS/PwC’s study. Still, in a crisis like this one, there’s no place like Paris.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering the European Union and France. He worked previously at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.