Luxury sector - News

[John Hjorth]

I personally think this is the right time to start such topic here in the 'General Discussion', because we - I mean those of us here on CoBF interested in the sector - constantly have things to bring up, that may belong to several different topics in the 'Investment Ideas' forum, that goes by 'one only' company ticker and name.

 

I also sense, that the traction may now be sufficient here on CoBF for such a topic.  

 

An industry, that is just so friggin' counterintuitive in its concepts and core to a frugal and rational, old fashion value investor!

 

So let the show begin!

 

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I think it was a couple of days ago @UK posted about his idea of LVMH being a possible vehicle of riding on the recent China stimulus. 

 

Bloomberg - Economics [September 27^th 2024] : China Cuts Key Rate, Frees Up Cash for Banks to Spur Growth,

Bloomberg - Markets [September 27^th 2024] : European Stocks Hit Record High on Rate-Cut Bets, China Stimulus.

Bloomberg - Markets [September 27^th 2024] : Luxury Stocks Set for Best Week in Years as China Fuels Revival.

Edited September 27 by John Hjorth

[UK]

11 hours ago, John Hjorth said:

start such topic

 

Great idea!

[John Hjorth]

The Economist, October 19^th 2024, p. 14, section 'Letters' :

 

Don't look so glum

 

"Fashion photography jolts the

viewer out of the grim and the

quotidian", you say ("Very in

vogue", October 5th.) Yet most

fashion models themselves

look grim. On the catwalk and

on the page they hide any

evidence of enjoyment in the

clothes they wear. They be-

coming unsmiling, agressive

posing machines daring the

viewer to look them in the eye.

They become coat hangers,

their humanity lost to art.

ROBIN LAURANCE

Oxford

 

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'Coat hangers' <- ? 

 

, Robin!

 

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https://www.dior.com/en_dk/fashion/womens-fashion/haute-couture-shows/autumn-winter-2024-2025-haute-couture-show

 

[John Hjorth]

Bloomberg - Markets [October 25^th 2024] : Luxury Fortunes Lose $58 Billion as Pandemic Era Splurge Ends.

 

Pesonally, I speculate,  we by now not are near the point of maximum pessimistic sentiment for this sector yet. We'll see.

 

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I did not know that Salma Hayek is the trophy wife of Francois-Henri Pinault.

 

[jfan]

https://www.ft.com/content/894aba60-de05-46b7-a8a8-9fd405c16889

 

Hermes vs Kering

[John Hjorth]

It's a fascinating phenomen to observe, how different the big luxury companies have evolved with regard to performance in last quarter, especially Hermes overshadowing or overshining everyone else and shooting out the lights, and Kering not doing well at all.

[bennycx]

Yea the Kering brands are not good at all. It’s absolutely importantly to be the top brand

[UK]

https://www.bloomberg.com/news/features/2024-11-03/luxury-crash-deepens-for-europe-s-lvmh-kering-as-chinese-shoppers-stay-away?srnd=homepage-europe

[John Hjorth]

That wall, it has hit,[<- ], is just awesome !

 

[nsx5200]

https://www.wsj.com/business/retail/luxury-designer-increasing-costs-quality-34263746: "Has Luxury Lost Its Shine?"

"For the last two decades, they have increased sales by “democratizing” access to luxury. By pushing into cheaper categories such as cosmetics, sunglasses and small handbags, they have intentionally drawn in millions of new middle-class consumers"

"The ultrarich, on the other hand, don’t tend to shout about their wealth as much. [...] One study found that for every $5,000 increase in the price of luxury goods, the brand’s logo shrinks by a centimeter"

"But social media is making it harder for luxury brands to maintain exclusivity."

 

Classic trade-off.  Short-term gain at the cost of exclusivity.  It seems like to do well long-term in this space, you have to be the most exclusive like Ferrari and be okay with growing slowly.

[Dalal.Holdings]

So when does this sector hit bottom ?

[John Hjorth]

1 hour ago, Dalal.Holdings said:

So when does this sector hit bottom ?

 

The answer to that question is the same as the answer for any other sector., when the question is asked.

[Spekulatius]

6 hours ago, Dalal.Holdings said:

So when does this sector hit bottom ?

When the body hits concrete.

[lnofeisone]

I'm waiting for some sort of turbulent event, like a BK or the winding down of an ETF.

[Dalal.Holdings]

I think it all depends on China. I have no clue as to how China goes

[Spekulatius]

1 hour ago, lnofeisone said:

I'm waiting for some sort of turbulent event, like a BK or the winding down of an ETF.

Trump tariffs everything (including luxury goods), China targets luxury goods from Europe in retaliation for EV tariffs. US luxury and consumer goods targeted by China with tariffs and social shaming.

[Milu]

I took the plunge and finally bought some LVMH at €585 per share. Price is at the upper end of the range I am comfortable with so intend to average down should things drop to the 500 or 400 level.

[lnofeisone]

15 hours ago, Spekulatius said:

Trump tariffs everything (including luxury goods), China targets luxury goods from Europe in retaliation for EV tariffs. US luxury and consumer goods targeted by China with tariffs and social shaming.

This is definitely a pathway this can play out and it'll start hurting bottom lines. I think that will be the time to enter or maybe a bit closer to 2029. 

[Spekulatius]

Maybe the wrong thread, but Porsche (the operating business, not the Holdco) trades now at 12x earnings. Balance sheet is clean with very little net debt. Maybe Arnault will take a look as this VW/ PAH /P911 construct gets ever more ludicrously valued.

[John Hjorth]

I woulden't rule out anything a priori when it's about Bernard Arnault. LVMH in the 'Others' compartment of the group chart owns a ... - shipyard!

 

Royal Van Lent Shipyard.

 

The year the build of his personal yacht was completed at the shipyard, a subsidiary of the shipyard, contaning 'something' naturally, was transferred internally upwards in the total group structure, from the shipyard, to the non-listed superstructure.

 

The mere mortals of us perhaps have had dreams of a nice company car. No sweat.

[John Hjorth]

This is old stuff, but, - so for starters here -, and background information :

 

The Art Newspaper [September 26^th 2019] : It's official: French tycoons finalise €300m donations for fire-ravaged Notre Dame.

 

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These guys did not sponsor this bragging and marketing  - 'one bid only per bidder, please' - bidding war [dick size contest?],  their contributions, themselves personally, - their listed holding companies - and thereby also their co-shareholders, did!

 

So, for those of us who may own LVMH, CDI or Kering, here is a sneak peak view to the bang for your buck! :

 

<Link to TVL video deleted here [waste of space], John>

Edited December 1 by John Hjorth

[Spekulatius]

Arnault deserves to have a spot in one of those painted glass windows. I think in the past, the artist often snug in their sponsors into the art work somewhere. Do i you ask yourself - whomps the guy standing next to king X and Saint Y, what his significance?

 

Well he may just be the guy who paid for the whole thing.

[John Hjorth]

Aaannd *poooff* the X post  with the video from Notre Dame by TVL suddenly disappeared! I don't know why ... Well, let it go ..., it was quite awesome, however.

[John Hjorth]

6 hours ago, Spekulatius said:

Arnault deserves to have a spot in one of those painted glass windows. I think in the past, the artist often snug in their sponsors into the art work somewhere. Do i you ask yourself - whomps the guy standing next to king X and Saint Y, what his significance?

 

Well he may just be the guy who paid for the whole thing.

 

It's actually an interesting phenomen to study, @Spekulatius ,

 

Rich mens libido and attractions towards to creating a reputation and a 'legacy' that will live on even after ones death, seems to me to be striking, because in the end, and eventually, we'll all be dead.

 

What has also been striking to me is, that over the years, my observations have been, that such phenomen has never been about rich women. I can't really come with any such counter example, to disprove such thesis.

 

I may be wrong, or even totally wrong here. I would apprecate then to be disproved by anyone here on CoBF.

[SharperDingaan]

I'm informed .... that the legacy's are daughters, family, and land; quiet, mostly unobtrusive... and nobody can do anything without them. Additionally, the odd masterpiece for the walk-in closet, and surprisingly ... coloured man made diamonds at 5-10 carats+ per stone before faceting. Hard-ass grandma has some of her ashes turned into pink diamonds, cut and set into favourite heirlooms, that will in-turn show up at many of life's on-going big occasions ..... 

 

Gotta hand it to her .... there's a certain amount of appeal to this , and it's a lot prettier than a gravestone!

 

SD

 

    

Edited November 23 by SharperDingaan