Latest news with #BernardArnault
Bloomberg
3 hours ago
- Business
- Bloomberg
Maybe Joe Rogan Oversold the Texas Dream
Save This is Bloomberg Opinion Today, the adrenalin produced when you round a corner of Bloomberg Opinion's opinions. Sign up here. On the surface, Texas has a lot of things going for it. LVMH CEO Bernard Arnault is planning to open a second factory in the Lone Star State. Hollywood A-listers are hoping producers will set up shop there. And rumor has it that another Tesla Diner might open in Starbase. But peek underneath the hood, and lots of things are going wrong: The first Louis Vuitton factory was a mess. The state's 'faith and family values' message is off-putting for filmmakers. And Elon Musk's fast-casual eatery is off to a rather rocky start, so don't put your money on there being a sequel in the South.
Bloomberg
16 hours ago
- Business
- Bloomberg
Insider-Trading Gang Allegedly Courted Future Rothschild Banker
Markets In a novel twist on insider trading probes, French authorities are investigating a network that allegedly tried to court elite university students and junior bankers, betting they'd one day land top finance jobs and hand over market-moving intelligence. One of those students would later work for Rothschild & Co. on a secret €2 billion ($2.3 billion) plan by luxury billionaire Bernard Arnault to delist Christian Dior — a deal that never surfaced publicly but still triggered suspicious trades in Paris, Dubai and New York, according to confidential investigative documents.
Zawya
19 hours ago
- Business
- Zawya
US tariffs will be test of luxury brands' pricing power
PARIS/NEW YORK - Luxury goods companies were spared their worst case scenario in Sunday's EU-U.S. trade deal but they face a delicate balancing act as already weak consumer demand tests their ability to raise prices further. Big labels like Chanel and LVMH's Louis Vuitton and Dior have relied on dramatic price increases in recent years to drive a chunk of their profit growth. Jacques Roizen, managing director, China, at Digital Luxury Group, said the deal struck by U.S. President Donald Trump and European Commission President Ursula von der Leyen on Sunday, imposing a 15% tariff on EU goods, brings much needed certainty to luxury's key U.S. market. Yet, "brands are treading carefully with further price hikes to avoid alienating younger and occasional shoppers," he said. Although baseline duties are below a hefty 30% levy that Trump had threatened just a couple of weeks ago, they are a far cry from the zero-for-zero tariff deal Brussels was hoping to clinch. Fresh tariffs also come as the luxury goods industry is counting on the U.S. as former growth engine China sputters and sales globally are in decline. 'Tariffs are definitely going to affect my buying behaviour, depending on the rate of the tariff. I would think twice before I just pick things up,' said Abida Taher, a 53-year-old physician who was out shopping at Saks Fifth Avenue in New York City last week and likes Valentino among other Italian and French brands. Bernard Arnault, chairman and CEO of French luxury giant LVMH, embarked on an intense lobbying campaign with EU leaders to ease tensions with the Trump administration and last week announced plans for a new Louis Vuitton factory in Texas. Such a move, however, would be too complicated and costly for most European brands - involving the transfer of local skills that take years to build up, industry experts caution. Some high end labels say they will be able to draw on pricing power to offset the cost of tariffs, but analysts and industry practitioners warn some players have limited wiggle room after a series of outsized price tag hikes. Big luxury companies profited from a rebound of consumer demand after the pandemic, hiking prices by 33% on average between 2019 and 2023, according to RBC estimates. The price tag of Chanel's classic quilted flap bag more than tripled between 2015 and 2024, while the Lady Dior bag and Louis Vuitton Keepall travel bag more than doubled, according to UBS analysts. LUXURY DISCONNECT Half of the luxury industry's sales growth came from price hikes in the four years from 2019, compared to a third between 2016 and 2023, UBS analysts said. Yet the sector lost 50 million customers last year, according to consultancy Bain, as economic pressures and price fatigue dampened appetite for designer clothing and handbags. Brands that got the pricing balance wrong are the ones struggling more today, said Flavio Cereda, who manages GAM's Luxury Brands investment strategy. "The significant deceleration in momentum, uneven as it was, is a natural consequence of a period of excess," said Cereda. Hermes, which notably held back on large price increases during the post pandemic boom, has outpaced rivals and analysts forecast a 10% rise in second quarter sales when it reports on Wednesday. UBS estimates that a 15% tariff on exports to the United States will require luxury brands on average to raise prices by around 2% in the United States, or around 1% globally if they want to avoid widening regional price gaps – or face an impact of around 3% on earnings before interest and tax. Such hikes may prove challenging while the latest round of luxury players' earnings shows little sign of a rebound. LVMH's second quarter sales missed expectations, weighed down by weakening sales at flagship brands Louis Vuitton and Dior, while outerwear specialist Moncler's sales contracted by 1% and Kering-owned Gucci is expected to continue to struggle. Caroline Reyl, head of premium brands at Pictet Asset Management, said there has been a "disconnect" between the prices of certain luxury items and their perceived quality and creativity in the past four years. Precious Buckner, a 37-year old clinical therapist from North Carolina, was looking at a Chanel classic flap bag at Saks Fifth Avenue in Manhattan last week but said if it goes up in price because of tariffs it would no longer be worth it. 'I'm going to these stores to see the size, the fit, how I like it, so I can get it on resale," Buckner said, noting she would be willing to pay $8,000 for a bag on a resale platform like The RealReal or Fashionphile rather than pay $12,000 in a department store. Bain forecasts worldwide luxury goods sales will fall by between 2% and 5% in 2025 after a 1% decline last year, the biggest contraction in 15 years excluding COVID. To counter the downtrend, the industry has embarked on a recruitment drive, with new designers at Chanel, Gucci, LVMH labels Dior, Celine, Givenchy and Loewe, and Versace. Yet, renewing styles to find a better alignment between prices and product value will take time. "You can't snap your fingers and do it in a couple of weeks," said Reyl. (Reporting by Mimosa Spencer and Sami Marshak; Editing by Lisa Jucca and Susan Fenton)
CNA
21 hours ago
- Business
- CNA
French luxury giant LVMH is exploring sale of Marc Jacobs brand
LVMH is working on a sale of its Marc Jacobs fashion brand as the luxury goods giant contends with a slump in demand, according to people familiar with the matter. The Paris-based conglomerate behind brands including Louis Vuitton, Dior and Moet Hennessy had approached potential buyers including Reebok owner Authentic Brands, about a sale of the fashion label, which it has owned since 1997, two people said. The attempt to offload one of its smaller brands follows a rough stretch for LVMH, which is controlled by French billionaire Bernard Arnault. The group has seen its share price slump 19 per cent over the past year, driven by a downturn in the luxury goods sector. LVMH and its competitors have been hurt by a combination of trade uncertainty affecting consumers around the world, weakening demand from Chinese shoppers and price rises that have turned away US customers. The talks, first reported by The Wall Street Journal, were ongoing and there were no guarantees that a deal will be concluded, the people said. LVMH and Authentic Brands declined to comment. On Jul 24 (Thu) LVMH said its operating profit declined by 15 per cent to just over €9 billion (US$10.44 billion; S$13.42 billion) in the first half of the year, a slightly better performance than analysts had forecast. LVMH's core fashion and leather goods business reported a steep decline in quarterly sales, highlighting continued weak demand for luxury goods after a period of price rises and heightened economic uncertainty. On Thursday's earnings call, Cecile Cabanis, LVMH's finance chief, said the company, known as a serial acquirer, was open to selling brands that do not fit within its portfolio, citing the decision to offload stakes in the Off-White and Stella McCartney fashion labels last year. 'We will not keep brands if we believe they are not a good add-on, or we are not the right operator to operate them,' said Cabanis. LVMH's last big deal was its US$16.2 billion acquisition of US jeweller Tiffany. Founded in 1984 by Marc Jacobs, the eponymous brand is known for its designer handbags and upmarket accessories. Jacobs served as LVMH's creative director between 1997 and 2014.
Japan Times
21 hours ago
- Business
- Japan Times
U.S. tariffs to test pricing by luxury brands already paying for dramatic hikes
Luxury goods companies were spared their worst case scenario in Sunday's EU-U.S. trade deal but they face a delicate balancing act as already weak consumer demand tests their ability to raise prices further. Big labels like Chanel and LVMH's Louis Vuitton and Dior have relied on dramatic price increases in recent years to drive a chunk of their profit growth. Jacques Roizen, managing director for China at Digital Luxury Group, said the deal struck by U.S. President Donald Trump and European Commission President Ursula von der Leyen on Sunday — imposing a 15% tariff on EU goods — brings much needed certainty to luxury's key U.S. market. Yet, "brands are treading carefully with further price hikes to avoid alienating younger and occasional shoppers," he said. Although baseline duties are below a hefty 30% levy that Trump had threatened just a couple of weeks ago, they are a far cry from the zero-for-zero tariff deal Brussels was hoping to clinch. Fresh tariffs also come as the luxury goods industry is counting on the U.S. as former growth engine China sputters and sales globally are in decline. "Tariffs are definitely going to affect my buying behavior, depending on the rate of the tariff. I would think twice before I just pick things up,' said Abida Taher, a 53-year-old physician out shopping at Saks Fifth Avenue in New York City last week who likes Valentino among other Italian and French brands. Bernard Arnault, chairman and CEO of French luxury giant LVMH, embarked on an intense lobbying campaign with EU leaders to ease tensions with the Trump administration, and last week announced plans for a new Louis Vuitton factory in Texas. Such a move, however, would be too complicated and costly for most European brands — involving the transfer of local skills that take years to build up, industry experts caution. Some high-end labels say they will be able to draw on pricing power to offset the cost of tariffs, but analysts and industry practitioners warn that some players have limited wiggle room after a series of outsize price tag hikes. Big luxury companies profited from a rebound of consumer demand after the pandemic, hiking prices by 33% on average between 2019 and 2023, according to RBC estimates. The price tag of Chanel's classic quilted flap bag more than tripled between 2015 and 2024, while the Lady Dior bag and Louis Vuitton Keepall travel bag more than doubled, according to UBS analysts. A woman with a Louis Vuitton shopping bag in Paris on April 17 | REUTERS Half of the luxury industry's sales growth came from price hikes in the four years from 2019, compared to a third between 2016 and 2023, UBS analysts said. Yet the sector lost 50 million customers last year, according to consultancy Bain, as economic pressures and price fatigue dampened appetite for designer clothing and handbags. Brands that got the pricing balance wrong are the ones struggling more today, said Flavio Cereda, who manages GAM's Luxury Brands investment strategy. "The significant deceleration in momentum, uneven as it was, is a natural consequence of a period of excess," said Cereda. Hermes, which notably held back on large price increases during the post pandemic boom, has outpaced rivals, and analysts forecast a 10% rise in second quarter sales when it reports Wednesday. UBS estimates that a 15% tariff on exports to the United States will require luxury brands on average to raise prices by around 2% in the United States, or around 1% globally if they want to avoid widening regional price gaps — or face an impact of around 3% on earnings before interest and tax. Such hikes may prove challenging while the latest round of luxury players' earnings shows little sign of a rebound. LVMH's second quarter sales missed expectations, weighed down by weakening sales at flagship brands Louis Vuitton and Dior, while outerwear specialist Moncler's sales contracted by 1% and Kering-owned Gucci is expected to continue to struggle. Caroline Reyl, head of premium brands at Pictet Asset Management, said there has been a "disconnect" between the prices of certain luxury items and their perceived quality and creativity in the past four years. Precious Buckner, a 37-year old clinical therapist from North Carolina, was looking at a Chanel classic flap bag at Saks Fifth Avenue in Manhattan last week but said if it goes up in price because of tariffs it would no longer be worth it. "I'm going to these stores to see the size, the fit, how I like it, so I can get it on resale," Buckner said, noting she would be willing to pay $8,000 for a bag on a resale platform like The RealReal or Fashionphile rather than pay $12,000 in a department store. Bain forecasts worldwide luxury goods sales will fall by between 2% and 5% in 2025 after a 1% decline last year, the biggest contraction in 15 years excluding the COVID-19 pandemic. To counter the downtrend, the industry has embarked on a recruitment drive, with new designers at Chanel, Gucci, LVMH labels Dior, Celine, Givenchy and Loewe, and Versace. Yet, renewing styles to find a better alignment between prices and product value will take time. "You can't snap your fingers and do it in a couple of weeks," said Reyl.
