MC.PA - LVMH Moët Hennessy Louis Vuitton S.E.
| Previous close | 404.50 |
| Open | 384.20 |
| Bid | 0.00 x 0 |
| Ask | 0.00 x 0 |
| Day's range | 375.25 - 391.95 |
| 52-week range | 285.70 - 439.05 |
| Volume | 1,626,587 |
| Avg. volume | 506,331 |
| Market cap | 194.078B |
| Beta (5Y monthly) | 0.91 |
| PE ratio (TTM) | 27.10 |
| EPS (TTM) | 14.23 |
| Earnings date | 28 Jan 2020 |
| Forward dividend & yield | 6.80 (1.68%) |
| Ex-dividend date | 21 Apr 2020 |
| 1y target est | 319.92 |
- Reuters - UK Focus
LIVE MARKETS-Traffic update: Milan, Tokyo streets calmer than usual
- Reuters - UK Focus
LIVE MARKETS-Tracking virus impact via road/web traffic, property sales
- Reuters - UK Focus
LIVE MARKETS-Black Monday? It's only getting started...
- Reuters - UK Focus
LIVE MARKETS-Coronavirus: deserted hotels, empty airports
- Simply Wall St.
Don't Sell LVMH Moët Hennessy - Louis Vuitton, Société Européenne (EPA:MC) Before You Read This
Today, we'll introduce the concept of the P/E ratio for those who are learning about investing. We'll show how you can...
- Reuters - UK Focus
LIVE MARKETS-European banks are killing it
* Wall Street closed for Washington's Birthday Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@tr.com), Joice Alves (joice.alves@tr.com), Julien Ponthus (julien.ponthus@tr.com) in London and Danilo Masoni (danilo.masoni@tr.com) in Milan.
- Reuters - UK Focus
LIVE MARKETS-Luxury and virus: Not just about Chinese shoppers
* Wall Street closed for Washington's Birthday Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@tr.com), Joice Alves (joice.alves@tr.com), Julien Ponthus (julien.ponthus@tr.com) in London and Danilo Masoni (danilo.masoni@tr.com) in Milan.
- Reuters - UK Focus
Gucci owner readies for Chinese no show at Milan, Paris fashion weeks
PARIS/NEW YORK, Feb 12 (Reuters) - Gucci and other luxury labels owned by France's Kering expect smaller crowds at their catwalk shows this month, with Chinese buyers and influencers set to miss the major marketing fixture. Luxury companies including Kering already face a sales hit from the coronavirus outbreak as they shutter shops in China and shelve advertising campaigns in one of the top markets for luxury goods. Chairman Francois-Henri Pinault said on Wednesday that Kering hoped to used video links to patch in guests unable to travel as a result of the outbreak.
- Bloomberg
In a Nation Edging Closer to Meltdown, One Company’s Stock Soars
(Bloomberg) -- Downtown Beirut often resembles a ghost town these days. When it does get busy, it’s usually because anti-government protesters have gathered, chanting slogans such as: “Eat the rich!”One of the targets of their anger has been Solidere, which rebuilt that part of Lebanon’s capital after a devastating civil war ended thirty years ago.Yet the company’s shares have soared since the demonstrators first took to the streets in October, even as the rest of the stock market sinks, the local currency tumbles on the black market and the cash-strapped government weighs defaulting on its Eurobonds.Once a bellwether for political stability in the Middle Eastern country, Solidere’s surge now reflects the desperation of Lebanese as the economy unravels.They’re scrambling to protect their savings from potential banking collapses or their dollar deposits from being converted into Lebanese pounds if the foreign-exchange squeeze gets more acute. Real estate and Solidere shares, which trade in dollars, are suddenly popular.“You have a new class of investors,” said Faysal Barbir, head of fixed income at FFA Private Bank in Beirut. “These investors were bank depositors that are now looking to diversify, and they have very limited options.”Solidere’s main shares have climbed 46% since touching a 15-year low in October, giving it a market valuation of $1.4 billion, the biggest in Lebanon. Over the same period the country’s equity gauge, the Blom Stock Index, has lost 21%, the most in the world.The protesters -- many of them young and jobless -- accuse the company of gentrifying central Beirut, which is filled with luxury shops such as Louis Vuitton, Hermes and Rolex, and pushing out working-class people. At least until the troubles started, two-bed flats overlooking a marina Solidere built would sell for more than $1 million. Carlos Ghosn, the former chief executive of Nissan Motor Co. and now international fugitive, lives barely a mile away.The company’s closely connected to the political establishment. It was founded by billionaire and then-Prime Minister Rafic Hariri. He was assassinated with a car bomb in 2005 in central Beirut. His son, Saad, also led a government, until the protests forced him to step down.Getting ScaredDespite Solidere’s unpopularity, it is seen as a safe bet compared to other stocks such as banks.Local lenders are under increasing strain. They’ve restricted customers’ ability to withdraw dollars and transfer money abroad. The government’s pressured them into lowering the interest rates they get on some sovereign bonds. Their shares are among the worst performers on the Lebanese bourse this year -- BLOM Bank SAL and Bank Audi SAL are each down more than 40%.Solidere made a $42 million profit in the first half of 2019, its most recent financial statements show, compared with a loss of almost $100 million a year earlier.“We are seeing quite a bit of demand on land,” said Ghazi Youssef, a Solidere board member and former lawmaker. “A lot of people are trying to park their money in real estate.”Still, Solidere’s hardly immune from Lebanon’s economic strife. Its return to profit was mostly down to a decision to increase land sales to repay bank loans. It hasn’t paid a dividend to shareholders in more than five years, though it plans to do so again in 2021, Youssef said.For now, though, it’s about the only choice for Lebanese with money to spare.“People are getting scared,” said Raja Makarem, chief executive of Ramco, a real estate advisory firm in Beirut. “Some people are rushing out of the banking system to go to real estate, thinking this will be a good temporary shelter for them until things get better.”\--With assistance from Filipe Pacheco.To contact the reporters on this story: Abeer Abu Omar in Dubai at aabuomar@bloomberg.net;Dana Khraiche in Beirut at dkhraiche@bloomberg.netTo contact the editors responsible for this story: Alex Nicholson at anicholson6@bloomberg.net, Paul Wallace, Paul AbelskyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Reuters - UK Focus
LIVE MARKETS- Closing snapshot: Shares fall on coronavirus and Irish election
* Irish banks fall on Sinn Fein election score * NMC Health surges on bid approach * Exor up on PartnerRe sale Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@tr.com), Joice Alves (joice.alves@tr.com), Julien Ponthus (julien.ponthus@tr.com) in London and Danilo Masoni (danilo.masoni@tr.com) in Milan. CLOSING SNAPSHOT: SHARES FALL ON CORONAVIRUS AND IRISH ELECTION (1705 GMT) European shares edged lower today as fears over the coronavirus' economic impact still weigh on sentiment and Irish shares struggled after a weekend general election.
- Reuters - UK Focus
LIVE MARKETS-The outlook for luxury: Not glamorous
* STOXX 600 dips * Irish banks fall on Sinn Fein election score * NMC Health surges on bid approach * Exor up on PartnerRe sale Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@tr.com), Joice Alves (joice.alves@tr.com), Julien Ponthus (julien.ponthus@tr.com) in London and Danilo Masoni (danilo.masoni@tr.com) in Milan. THE OUTLOOK FOR LUXURY: NOT GLAMOROUS (1624 GMT) As the coronavirus hits consumer spending in China the short-term outlook for luxury goods is quite grim.
- Bloomberg
There’s a Lesson for Luxury in the Coronavirus Crisis
(Bloomberg Opinion) -- With the death toll from the coronavirus rising, the fate of high-end handbag sales still seems of minor consequence. But the $300 billion luxury industry’s over-dependence on Chinese spending was underlined again on Friday when British fashion house Burberry Group Plc said it could no longer stand by its previous financial forecast because of the spread of the illness.Just two weeks ago, the company shrugged off disruption in Hong Kong to lift its outlook for sales growth excluding currency movements to a percentage in the low single digits, while anticipating that the operating margin would be broadly stable in the year to March 2020. Analysts at Morgan Stanley said Friday’s warning could imply a 5% cut to 2020 earnings.Burberry is particularly exposed to the epidemic. It generates about 40% of its sales from Chinese consumers at home and abroad. That’s above the 35% for the industry as a whole, according to Bain & Co. and Altagamma. So shutting some shops on the mainland and reducing hours at others has an out-sized effect.It’s too early to know what the end result will be for Burberry and the industry as a whole, but one key lesson is coming into sharp relief: While Chinese shoppers are a powerful force for the industry, no brand should neglect their customers closer to home, or stop trying to drum up demand in other corners of the world. When the Chinese market slumped in 2015 and 2016 because of a government crackdown on extravagance and gyrating stock markets, luxury houses all pivoted toward shoppers in Europe and the U.S. They have lost sight of the need to foster these markets since.For Burberry, it’s a particularly sensitive time to face such uncertainty in its biggest market. The group is in the midst of trying to revive its brand, best known for its black, white, tan and red check. While new iterations, such as the TB Monogram, are gaining traction, Burberry is having to prioritize. It’s now unclear whether a fashion show in Shanghai in April, will go ahead. The first Chinese showcase under new designer Riccardo Tisci will have specially created merchandise, clearly a way to build Burberry’s profile amid its rejuvenation efforts.Given these characteristics — high Chinese exposure plus a turnaround strategy — Prada SpA also looks to be at risk, and the Italian maker of the iconic nylon bag has already closed some stores in mainland China and Macau. The list of other luxury companies that are very dependent on China and Hong Kong is long. Swatch Group AG and Richemont are the most exposed, according to analysts at Bernstein. And Gucci, which accounts for 60% of French parent Kering SA’s sales and 80% of its operating profit, has been a hit with Chinese shoppers over the past three years. Anyone who has witnessed the proliferation of Gucci T-shirts, not all the real thing, in cities from Shanghai to Beijing would attest to its popularity.By contrast, Bernard Arnault’s LVMH looks to be better prepared to handle such a shock. With brands including Moet & Chandon champagne, pop star Rihanna’s beauty line and soon Tiffany & Co. jewelry, it has broad diversification by both geography and product range. Last year, for example, 24% of its sales from the U.S.But given the whole industry’s reliance on Chinese big spenders, no luxury or consumer brand with exposure to the them, wherever they shop, will be immune. Burberry said spending in Europe and other tourist destinations was less affected by the outbreak, but it expected conditions here to worsen too. This week, Coach owner Tapestry Inc., Michael Kors and Versace parent Capri Holdings Ltd. and Estee Lauder Cos. all lowered earnings guidance, citing the virus. Even luxury parka maker Canada Goose Holdings Inc., which has a strong following in the U.S. and Europe, has felt the impact of the outbreak. On Friday it lowered its full-year sales and profit guidance.Global luxury sales could expand by just 1% this year, according to analysts at Jefferies, after what they now expect to be a brutal 20% decline in Chinese demand in the first half. Before the outbreak, they were expecting the industry’s sales to grow by 5% in 2020. While luxury shares have fallen over the past three weeks, valuations remain close to 10-year highs. As I have noted, the stocks have proved remarkably resilient in the face of everything from trade skirmishes to protests in Hong Kong.Burberry’s warning is a stark reminder that that could be about to change.To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of 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.
- Reuters - UK Focus
Sparkle fades as coronavirus risks wiping out luxury goods growth
The luxury goods industry normally relishes the spotlight, but in the case of China's coronavirus it is rueing being one of the most globally exposed sectors to an epidemic that risks all-but wiping out its sales growth this year. Brands from Burberry to Estee Lauder are shutting stores and cutting profit forecasts as business in the industry's biggest market has virtually ground to a halt.
- Bloomberg
France's Richest Man Gets a Free Lunch From the ECB
(Bloomberg Opinion) -- Bernard Arnault, the boss of LVMH Moet Hennessy Louis Vuitton SE, exceeded even his own incredibly low yield expectations in his company’s giant bond sale this week — which included the biggest corporate issue in euros since 2016. The luxury giant raised 7.5 billion euros ($8.3 billion) and 1.55 billion pounds ($2 billion), over a range of maturities from two to 11 years, to help finance its $16 billion purchase of Tiffany & Co.Two of the five euro tranches were placed at negative yields, meaning investors are paying single A-rated LVMH to borrow money. Arnault’s expectations back in November for yields from the sale of “between 0% and 1%” have been surpassed. Even the 11-year tranche has a coupon of just 0.45%. M&A has never been cheaper.France’s richest man can thank the European Central Bank for this state of affairs. The restart of its 189 billion-euro Corporate Sector Purchasing Program has driven credit spreads ever lower. While the central bank wants to lessen the funding costs of European companies — and local subsidiaries of global firms — to make it easier for them to invest, it may not have been meaning to help a French luxury behemoth snap up an American jewelry icon. It’s almost certain that a bond of this size will have been bought by the ECB (or will be picked at some point in the near future). Often the bank takes up to 20% of eligible issues, and there has a been a real paucity of high-quality credit since the Quantitative Easing program kicked back into life.There was another jumbo corporate sale in Europe this week by U.S. Media giant Comcast Corp., which issued notes worth 3 billion euros and 1.4 billion pounds. This type of sale is known as a “reverse Yankee,” where an American company issues debt, but not in dollars. Maybe we could refer to LVMH’s use of dirt cheap funding in its home currency to buy an American company as a “reverse, reverse Yankee.” The world of finance is ever flexible.International Business Machines Corp. also pulled off a bumper bond deal in Europe earlier in the week; the euro credit market is truly open for business. Although January was a record month for issuance, it was dominated by financials and sovereign, supranational and agency (SSA) issuers. Credit spreads have now also moved close to their tightest ever levels, amid the general flight-to-quality sparked by the Coronavirus outbreak. It’s just a shame that most of these jumbo deals are being used to refinance existing operations more cheaply — rather than spurring an investment boom, or local European mergers and acquisitions that would help the continent’s moribund corporate environment. Still, the ECB is doing what it can; if the financing heads over the Atlantic sometimes, that’s the price you pay for the ocean of quantitative easing that’s been made available. No wonder corporates everywhere are filling their boots.To contact the author of this story: Marcus Ashworth at mashworth4@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.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.
- Bloomberg
Billionaire Bags a Bling Bargain
(Bloomberg Opinion) -- Maverick retailer Mike Ashley likes a flutter at the casino. With his punt on a stake in upmarket handbag maker Mulberry Group Plc, the British billionaire can’t lose.Ashley’s Frasers Group Plc, formerly Sports Direct, said late Monday that it had acquired a 12.5% interest in Mulberry, maker of the iconic Bayswater bag. Ashley, who owns 63% of Frasers, has long dabbled with investments in rivals. Some, such as a holding in JD Sports Fashion Plc, paid off handsomely. But a 30% stake in Debenhams Plc was wiped out when the U.K. department store chain was taken over by its lenders last year.The interest in Mulberry has all the hallmarks of a winner. First, Ashley has likely picked it up on the cheap. Frasers did not disclose the cost. But at Monday’s close, the stake would be worth about 19 million pounds ($24.7 million).Shares in Mulberry have never really recovered from a botched strategy around five years ago, when Bruno Guillon, a former Hermes manager who was chief executive officer at the time, tried to take the leather goods and apparel company upmarket, alienating many of its core customers. New CEO Thierry Andretta and designer Johnny Coca, who joined from Celine, have since returned the brand to its accessible luxury heartland. But the shares remain about 85% off of their 2012 peak.Second, there’s clear strategic logic for Ashley to work more closely with Mulberry. The idea of transforming House of Fraser into the “Harrods of the high street” has been widely mocked because of the department store’s poor performance following its purchase in August 2018. But Ashley clearly wants to take the chain more upmarket. It’s likely to end up as a smaller, more high quality estate.Mulberry is currently in 19 House of Fraser stores, where it trades well. It is also available at Flannels, Ashley’s boutique that sells the likes of Canada Goose and Balenciaga, which is still flying.But there is another reason why Ashley’s interest in Mulberry might pay off. The quintessentially British brand has long been seen as a takeover target. Consolidation in luxury is intensifying, with LVMH’s $16.5 billion purchase of Tiffany & Co and speculation swirling around Moncler SpA and Prada SpA. While it can’t be ruled out that Ashley will lift his interest further, a big luxury group could also make a move for Mulberry.It is tightly held, so any predator would have to convince the Ong family, which owns 56%, to sell. That may not be easy given that the value of its stake has fallen over recent years. But it may be worth trying given that quality assets are rare, especially those without a big stake held by the families that founded the companies. Longer term, there’s also the possibility that Burberry Group Plc, if its turnaround works, could be interested as part of any future efforts to turn itself into a British luxury conglomerate.In the event of any approach, Ashley not only stands to gain financially, but secures a seat at the table when it comes to this strategically important brand.Conversely, there’s nothing to stop Ashley filling his luxury shopping bag elsewhere. For example Burberry, still in the midst of its turnaround right now, commands a large selling area in Flannels’ new flagship store on Oxford Street for its street wear and rejunvenated accessories.Mulberry might not be this billionaire’s last bling bet. To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of 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.
- Simply Wall St.
LVMH Moët Hennessy - Louis Vuitton, Société Européenne Just Released Its Full-Year Earnings: Here's What Analysts Think
LVMH Moët Hennessy - Louis Vuitton, Société Européenne (EPA:MC) shares fell 3.2% to €399 in the week since its latest...
- Bloomberg
Box-Maker Who Wowed Trump With Garbage Has $6.6 Billion Fortune
(Bloomberg) -- Donald Trump expressed his astonishment.“It’s really amazing,” the American president said during a September tour of an Ohio paper-recycling mill, accompanied by its billionaire owner, Anthony Pratt. “They start off with waste, garbage, and they end up building it into a -- making it into really great cardboard and paper.”Trump’s tour of the new facility in Wapakoneta was a coup for the Australian mogul behind Pratt Industries USA Inc., with annual revenue of more than $3 billion.It’s also indicative of how far he’s come since moving to the U.S. in the early 1990s in search of his own legacy, after his father Richard built one of Australia’s biggest fortunes with another recycling business called Visy.“We were a schlock recycler,” Pratt, 59, said in a phone interview last month.The Conyers, Georgia-based company struggled for about 15 years until public perception of recycling began to shift, he said. He was helped by Walmart Inc.’s 2006 commitment to reduce packaging by 5% across its supply chain.“All of a sudden the big corporates wanted to recycle paper and we were the only ones who were 100% recycled,” he said.See also: Louis Vuitton mogul stays on Trump’s good side with Texas jobsPratt, who’s chairman of both Pratt Industries and Visy, said he’s responsible for five of the last six paper mills to begin operating in the U.S., where the group has about 70 factories.“We made a pledge to invest $2 billion in America to create 5,000 high-paying manufacturing jobs, mainly in the Midwest,” he said. “That was music to President Trump’s ears.”Trump, who also was accompanied by Australian Prime Minister Scott Morrison, praised the investment.“That’s great news for America, and we also spend a lot in Australia,” he said. “I think we’re your largest investor, by far.”While Trump has said he supports a clean environment, his administration has reversed regulations designed to promote clean air and water and he’s withdrawing the U.S. from the Paris climate accord.The White House declined to comment.Family’s FortunePratt’s success in the U.S. has helped lift his personal wealth to $6.6 billion, making him Australia’s sixth-richest person, according to the Bloomberg Billionaires Index, a ranking of the world’s 500 wealthiest people. The family’s combined fortune, which includes his sisters’ Visy stakes, is about $11 billion. Pratt’s Visy holding is worth about $2 billion.Access to 30-year green bonds aided growth without the need for external investment, Pratt said. Rapid industry consolidation, access to cheap waste and the cutting of freight costs by building factories near mills also helped.Pratt has benefited from investment in technologically sophisticated mills, low-cost recycled paper and vertical integration, said Joshua Zaret, a Bloomberg Intelligence analyst specializing in packaging, paper and forest products.“He’s taken a different approach and it’s been very successful,” Zaret said.Pratt splits his time between Melbourne and New York, where his Staten Island paper mill churns out more than 1 million pizza boxes a week. Each day, three barges transport about 1,500 tons of waste paper down the Hudson River to the mill that has been operating since 1997.Converting WasteAt the company’s five clean-energy plants -- four in Australia and one in the U.S. -- waste is converted into electricity to help power the paper mills in what Pratt describes as a closed-loop system.Pratt’s market share in the U.S. is about 6.5%. In Australia, Visy has 55% of the market and annual revenue of about $3.4 billion.Pratt said he wants more in the U.S. but won’t be rushed. He plans to have 12 paper mills in operation during his lifetime and sees two more generations of growth for the family business.Sales will be aided by a broader understanding of the roll of recycling in combating climate change, he said.“Recycled paper has become cool.”\--With assistance from Josh Wingrove and Jack Witzig.To contact the reporter on this story: Andrew Heathcote in Melbourne at aheathcote4@bloomberg.netTo contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Peter Eichenbaum, Steven CrabillFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Reuters
Ex-Luxottica boss Guerra to head LVMH's hospitality, restaurant business - sources
MILAN/PARIS (Reuters) - Former Luxottica boss Andrea Guerra is set to join LVMH to head the French luxury goods giant's hospitality and restaurant business, two sources familiar with the matter said on Thursday. Earlier this month, Guerra, 54, stepped down from operational responsibilities at Eataly, a high-end food retailer where he became executive chairman after a decade at the helm of Ray-Ban owner Luxottica. One of the sources said Guerra's role at LVMH would be a broad one, overseeing all activities linked to hospitality and restaurants, tapping into growing demand for top-notch travel and food.
- Bloomberg
The King of Luxury Is Armed for Uncertain Times
(Bloomberg Opinion) -- When even LVMH misses estimates, it’s not a good look for the luxury sector.While the owner of the Louis Vuitton and Christian Dior brands still delivered 8% growth in organic sales in the final quarter of the year, this was slightly below the consensus of analysts’ estimates of 8.7%. Organic sales from the fashion and leather goods division — its driver, accounting for 41% of sales and 64% of operating profit in 2019 — rose by 15%. That’s impressive, but still slower than the second and third quarters.The world’s biggest luxury group hasn’t been immune from the unrest in Hong Kong and a slowdown in Japan after the country increased its consumption tax in October. The backdrop could get worse, given the spread of the deadly coronavirus, which has claimed more than 130 lives.LVMH’s chairman and founder, Bernard Arnault, said on Tuesday that if the outbreak was contained quickly — say in two to two-and-a-half months — the effect would be manageable. If it lasted longer, it would be more serious, he added. Given that Chinese consumers accounted for about 35% of luxury purchases last year, according to Bain & Co. and Altagamma, all top end groups are exposed to the spread of the deadly virus. It’s clearly too early to say how things will progress, and with China grappling with how best to stop the spread of a novel virus that’s infected thousands of people, now isn’t the time to worry about handbag sales. But the uncertain outlook speaks to just how dependent many of the world’s global consumer brands are on China’s market and Chinese consumers wherever they are.For example, on Tuesday Starbucks Corp. said that it would have upgraded its financial projections for the year had it not been for the outbreak in mainland China, its most important growth market. While its high-end Roastery in Shanghai may look like a luxury temple, with queues to rival those at Louis Vuitton, it is just one of its 4,000 outlets across the country. The group has closed more than 2,000 cafes in response to the spread of the illness.As for LVMH, while it will be hit just like the other big brands, it may be better placed to weather any impact than most of its rivals. Its exposure to Chinese consumers is around the industry average — about 30% — according to analysts at UBS. Thanks to both its geographic and product diversification, with sizable operations in the U.S., for example, it is less dependent on Chinese shoppers than many of its rivals.With sales about three times that of its nearest competitor, it also has scope to change its focus, for example by investing in marketing campaigns to attract domestic customers in the Europe and the U.S., where it’s just bought diamond jewelry specialist Tiffany & Co. It also has scope to cut costs in Asia, if the situation deteriorates further. Consequently, LVMH would face a potential 3% fall in this year’s earnings from a 20% drop in Chinese consumption in the second quarter, according to UBS, which expects some other luxury groups would be hit harder. LVMH hasn’t been immune from the sell-off in luxury shares over the past 10 days. It’s down about 6% since Jan. 17. Even with the recent dip, the shares are up about 60% over the past year, and remain at a deserved premium to the Bloomberg Intelligence top luxury peer group.It’s still early days in terms of establishing the toll the deadly virus might take on luxury and consumer groups. But LVMH’s scale and financial strength should make it one of the more resilient.To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of 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.
- Reuters - UK Focus
RPT-GRAPHIC-Why the 'devil' coronavirus has hit European stocks hard
A whopping $200 billion was wiped from European stocks at the start of this week as the deadly coronavirus prompted investors to cut back exposure to companies with a strong presence in China, the world's fastest-growing consumer market. Hundreds of millions of people have been preparing to travel for the Chinese holidays, stoking concerns infection rates may accelerate during the period - which is also a peak retail season in China and overseas. The virus - which Chinese President Xi Jinping has described as a "devil" - has had a bigger impact on European companies than their U.S. peers due to their high revenue exposure to China.
- Reuters
Louis Vuitton owner LVMH's sales growth slows in fourth quarter
Sales growth at luxury goods group LVMH slowed slightly in the fourth quarter, pushed down in part by a sharp drop in revenue in Hong Kong where months of violent protests have scared away many high-end shoppers. The company, which owns labels including Louis Vuitton and Christian Dior, said the new coronavirus outbreak this month forced it to shutter some stores in the Chinese city of Wuhan, but it believed the peak of the virus would pass in a few weeks, limiting the impact on sales. LVMH posted record revenue and profit for the whole of 2019.
- Reuters - UK Focus
European shares rebound from worst day in nearly four months
European stocks rose on Tuesday, after posting their worst day in about four months in the previous session on concerns about the potential impact on businesses from the coronavirus outbreak. The pan-European STOXX 600 index was up 0.3% at 0807 GMT. Airbus was the biggest boost to the benchmark index, after saying it had agreed to reach a settlement with French, British and U.S. authorities regarding a probe into allegations of bribery and corruption.
- Reuters - UK Focus
LIVE MARKETS-On our radar: SAP, Tullow, luxury stocks
- Reuters - UK Focus
LIVE MARKETS-New year rally succumbs to virus scare
* European shares down sharply on China virus worries * Miners, luxury, airlines lead sectoral fallers * Italian banks outperform sector as regional vote brings relief * STOXX set for worst day since October * Volatility surges * Wall Street slumps 2% Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Joice Alves. The pan-European STOXX 600 index, France's CAC 40 and Germany's DAX are now in negative territory year-to-date as markets are heading for their biggest one-day fall in four months on fast-spreading China virus fears.
