|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||385.90 - 395.85|
|52-week range||278.70 - 439.05|
|Beta (5Y monthly)||0.95|
|PE ratio (TTM)||29.66|
|Earnings date||22 Jul 2020 - 27 Jul 2020|
|Forward dividend & yield||4.80 (1.22%)|
|Ex-dividend date||07 Jul 2020|
|1y target est||319.92|
(Bloomberg) -- LVMH’s board has discussed its planned $16 billion purchase of Tiffany & Co. amid reports that the deal might need to be reworked as the Covid-19 pandemic and protests in U.S. cities cloud the jeweler’s prospects.The Louis Vuitton owner said directors met Tuesday to examine the agreement. LVMH ruled out buying Tiffany shares on the open market even though they trade at a 15% discount to the agreed price of $135 a share.The French company said its board “focused its attention on the development of the pandemic and its potential impact on the results and perspectives of Tiffany & Co. with respect to the agreement that links the two groups.”While analysts have said the jeweler complements LVMH’s business, the deal may create headaches. Tiffany’s reliance on the U.S. market makes it more vulnerable in the face of the Covid-related economic fallout and rising social unrest.Since the deal -- the largest in the luxury-goods industry -- was reached in November, the virus outbreak has decimated demand. The political fallout from the death of George Floyd additionally risks weighing on consumer appetite, and Tiffany shares traded near a two-month low Thursday.LVMH shares were little changed in Paris. Tiffany is prepared to litigate if LVMH proposes a price cut, CNBC’s David Faber said, citing people familiar with the situation.Investors have applauded the acquisition of Tiffany as a way for the luxury giant to better compete with Richemont-owned Cartier for leadership in the global jewelry market. However, Tiffany shares started dropping in March, when people familiar with the matter told Bloomberg that LVMH was considering buying shares on the open market and examining possible legal hurdles to the idea.What Bloomberg Intelligence Says:LVMH has reiterated its mid-April message of not dipping into the market to buy Tiffany shares, and we believe the deal will complete this year.\-- Deborah Aitken, senior analystLVMH Sticks to Tiffany Agreement, No Dipping in Downturn: ReactLVMH responded at the time that it was currently bound by an agreement not to buy Tiffany stock on the open market. On Thursday it reiterated that it is not considering such a step.Women’s Wear Daily reported earlier this week that the planned deal is on shaky ground. Tiffany would be worth $60 to $75 a share if LVMH walks away, Credit Suisse analyst Michael Binetti wrote Wednesday.(Updates with shares in fifth paragraph)For 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.
Maybe LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY) is trying to get a better price for Tiffany (NYSE: TIF) after all. It maintained, "LVMH is currently committed not to buy Tiffany shares." Acquiring the stock that way would have significantly lowered the cost of the deal as Tiffany's stock plunged about 20% or so to around $105 a share when the COVID-19 outbreak was declared a pandemic.
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Luxury fashion conglomerate LVMH said it was 'not considering buying Tiffany shares on the market.'
LVMH <LVMH.PA>'s board met this week to discuss the fallout from the coronavirus crisis on its $16.2 billion purchase of U.S. jeweller Tiffany <TIF.N>, the luxury goods group said on Thursday, opening the door to a possible attempt to review the deal terms. LVMH, run by France's richest man, Bernard Arnault, agreed to buy Tiffany in November, before the retail business was hammered by the pandemic. Arnault is now exploring ways to reopen negotiations and potentially pressure Tiffany to lower the agreed deal price of $135 per share, people familiar with the matter told Reuters, including by examining its compliance with financial covenants.
Paris, June 4, 2020The Board of Directors of LVMH Moët Hennessy Louis Vuitton, met on Tuesday, June 2nd, 2020 and notably focused its attention on the development of the pandemic and its potential impact on the results and perspectives of Tiffany & Co with respect to the agreement that links the two groups. Considering the recent market rumors, LVMH confirms, on this occasion, that it is not considering buying Tiffany shares on the market. LVMH LVMH Moët Hennessy Louis Vuitton is represented in Wines and Spirits by a portfolio of brands that includes Moët & Chandon, Dom Pérignon, Veuve Clicquot Ponsardin, Krug, Ruinart, Mercier, Château d’Yquem, Domaine du Clos des Lambrays, Château Cheval Blanc, Colgin Cellars, Hennessy, Glenmorangie, Ardbeg, Belvedere, Woodinville, Volcán de Mi Tierra, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Cape Mentelle, Newton, Bodega Numanthia and Ao Yun. Its Fashion and Leather Goods division includes Louis Vuitton, Christian Dior Couture, Celine, Loewe, Kenzo, Givenchy, Pink Shirtmaker, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Nicholas Kirkwood, Loro Piana, RIMOWA, Patou and Fenty. LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Perfumes Loewe, Benefit Cosmetics, Make Up For Ever, Acqua di Parma, Fresh, Fenty Beauty by Rihanna and Maison Francis Kurkdjian. LVMH's Watches and Jewelry division comprises Bvlgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred and Hublot. LVMH is also active in selective retailing as well as in other activities through DFS, Sephora, Le Bon Marché, La Samaritaine, Groupe Les Echos, Cova, Le Jardin d’Acclimatation, Royal Van Lent, Belmond and Cheval Blanc hotels.LVMH CONTACTS Analysts and investors Chris Hollis LVMH + 33 1 44 13 21 22 Media Jean-Charles Tréhan LVMH + 33 1 44 13 26 20 MEDIA CONTACTS France Brune Diricq / Charlotte Mariné Publicis Consultants + 33 1 44 82 47 20 France Michel Calzaroni / Olivier Labesse / Hugues Schmitt / Thomas Roborel de Climens DGM Conseil + 33 1 40 70 11 89 Italy Michele Calcaterra, Matteo Steinbach SEC and Partners + 39 02 6249991 UK Hugh Morrison, Charlotte McMullen Montfort Communications + 44 7921 881 800 US James Fingeroth, Molly Morse, Anntal Silver Kekst & Company + 1 212 521 4800 China Daniel Jeffreys Deluxewords +44 772 212 6562 +86 21 80 36 04 48 Attachment * LVMH Press Release 4 June 2020
LVMH agreed to acquire Tiffany in November, but the deal has yet to close, pending regulatory approvals. Arnault said at the time Tiffany would "thrive for centuries to come" under LVMH. Arnault has been in talks with his advisers this week to identify ways to pressure Tiffany to lower the agreed price of $135 per share in cash, the sources said.
LVMH agreed to acquire Tiffany in November, but the deal has yet to close, pending regulatory approvals. Arnault said at the time Tiffany would "thrive for centuries to come" under LVMH. Arnault has been in talks with his advisers this week to identify ways to pressure Tiffany to lower the agreed price of $135 per share in cash, the sources said.
(Bloomberg Opinion) -- Even the most upmarket buyers like to get their money’s worth. No wonder LVMH Moet Hennessy Louis Vuitton SE is having second thoughts about its $16 billion takeover of Tiffany & Co., according to Women’s Wear Daily.Walking away from the deal, which is due to close shortly, wouldn’t be ideal after all the fanfare made about the merits of buying the iconic U.S. jewelry brand. But it would be remiss of LVMH Chairman Bernard Arnault not to try to get better terms — particularly since he has the advantage.The world has changed since the takeover was agreed in November. The Covid-19 pandemic has dented luxury goods demand with shops shuttered and sweatpants-wearing consumers locked down with nowhere to go. Industrywide sales could fall as much as 35% this year, according to Bain & Co. The civil unrest in the U.S. is another risk, particularly for an American brand.So, depending on the fine print in the purchase agreement, Arnault could try to wriggle out altogether. There are doubts that it will go ahead as planned. Tiffany shares closed at $117 on Tuesday, significantly lower than LVMH’s $135 offer price. But dropping the deal now, particularly if it led to a lengthy legal battle, could risk some reputational damage. It could also signal that LVMH, the world’s dominant luxury conglomerate, built on a history of strategic, successful acquisitions, isn’t so resilient after all. True, even after the pandemic, LVMH’s market capitalization is close to 200 billion euros ($224 billion). So Tiffany is a relatively modest transaction. But the French fashion giant won’t have escaped the maelstrom, not only in luxury goods, but in cosmetics, with its Sephora chain, and in duty-free travel retail, with DFS.Tiffany is still a prized asset, with huge potential if it can be elevated from simply affordable luxury to mega-bling. So Arnault is most likely to try to burnish his standing as a dealmaker by extracting better terms for his shareholders. Especially since Tiffany already needed some polish to achieve its potential, and the task will be even more difficult now. It will require significant investment both in the company’s product range and marketing.Against this backdrop, trying to save on the purchase price looks sensible. A precedent has already been set by Sycamore Partners, which tried to extract itself from its $525 million deal to buy lingerie brand Victoria’s Secret. In the end, L Brands Inc. ended up terminating the agreement. But it’s hard to see Tiffany doing this — it’s unlikely to want to pursue its turnaround plan in a such a difficult environment without a muscular parent. Given the luxury slump, it’s not obvious that Richemont or Gucci-owner Kering SA would step in.Of course, Arnault could take his chances, withdrawing now — if he can — with the aim of trying to buy Tiffany again later at a lower price. But that’s a risky strategy. Another friendly deal wouldn’t likely be forthcoming, and often once a trophy asset is lost, it doesn’t become available again.Arnault would be better off holding onto this bauble, and, like many luxury shoppers right now, trying to negotiate a hefty discount.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.
Tiffany's shares closed down nearly 9% after the news. LVMH's board called a meeting in Paris on Tuesday night to discuss the matter, WWD reported, citing sources. LVMH's board is concerned about the COVID-19 pandemic and protests linked to the death of George Floyd at the hands of Minneapolis police, according to the report.
(Bloomberg Opinion) -- Another day, another billionaire takes a seat at the table at storied French publisher and retailer Lagardere SCA. Luxury tycoon Bernard Arnault yesterday joined Vincent Bollore and Marc Ladreit de Lacharriere as a player in a busy field of French establishment figures gaining influence at the company. For ordinary shareholders, it’s a very mixed blessing.Lagardere is worth just 1.9 billion euros ($2.1 billion). Even a dramatic turn in its fortunes would make scant difference to a billionaire’s net wealth. But one titan after another has rushed to the aid of scion and general partner Arnaud Lagardere after London-based hedge fund Amber Capital U.K. LLP pressed for an overhaul of the company’s governance.Bollore’s Vivendi SA and Ladreit de Lacharriere took big stakes last month, helping to defeat Amber’s resolutions for new board members at the annual meeting. (Vivendi has further upped its stake in the company to 16%.) That took the pressure off Lagardere personally. A new board might have pushed him to make changes to the so-called commandite partnership structure through which he controls the group with just a 7% shareholding.But there was still a question of whether Lagardere might try to bolster his own finances by selling the commandite of his own accord. Surrendering control would, after all, be compensated. That would improve the financial position of the holding company through which he holds his Lagardere stake.The intervention by Arnault further complicates the dynamics. Unlike the others, the head of LVMH Moet Hennessey Louis Vuitton SE is investing not in Lagardere the company directly but in Arnaud Lagardere’s personal vehicle, taking approximately 25%, reportedly for less than 100 million euros. While Arnault owns a radio station and two national newspapers, the move looks more personal than tactical. He and Lagardere’s father Jean-Luc were friends. Both families have sat on each other’s boards. He appears to be doing Lagardere a big favor.The precise transaction terms aren’t clear. It’s likely that Lagardere himself receives some cash directly, with the rest going into the vehicle to cut leverage. Either way, it’s a huge boost for him. If the failure of Amber’s resolutions meant the board was unlikely to push to make Lagardere a normal French corporation, it’s now less likely that he will rush to seek the transformation himself.As things stand, Lagardere may still technically be in control, but he has gained a co-pilot in Arnault, and the luxury billionaire now appears closer to the steering wheel than Bollore. It’s a messy situation and the logic for ending the commandite remains. With the pressure off, Lagardere is in a more advantageous position to negotiate terms to his liking. Minority shareholders can but hope everyone involved sees a mutual interest in getting round the table and talking.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.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 Opinion) -- Almost three weeks ago, the American retailer J. Crew Group Inc. filed for bankruptcy after it fell out of fashion. But there’s one item from the once-feted store that shoppers just can’t get enough of: masks. The most recent batch of nonmedical face coverings in its signature fabrics — plain blue shirting and blue-and-white stripes — has sold out on its British website.Upmarket, stylish face coverings could provide a bit of a boost in a coronavirus-strewn landscape, where luxury goods sales are expected to drop as much as 35% this year, according to Bain & Co. estimates. To give some idea of the pent-up demand, fashion search platform Lyst said searches for masks are up 1,600% over the past month, compared with a year earlier. That’s sparked a huge debate in the luxury industry as to whether to cash in. After all, if we’re going to have to wear masks anyway, why not make them chic?It may be tempting. At the height of the crisis, many fashion houses — including LVMH’s Louis Vuitton and Christian Dior; Kering SA’s Gucci; Prada SpA; Burberry Group Plc; and Ralph Lauren Inc. — repurposed some production facilities to make personal protective equipment for donation to medical workers on the front lines. Burberry is poised to take delivery of a special mask-making machine at its mill in Keighley, Yorkshire. But the items will be for donation, not for sale in its shops. And they certainly won’t be made out of its iconic red, white, black and tan check.While the brands have gained the requisite skills, there are considerable risks associated with turning masks into fashion statements. So far, the bling behemoths are wisely keeping a respectable social distance.If luxury goods companies were to make masks for profit, not only would they need to look stylish, but they would probably have to boast some health effectiveness, too. And they’d have to be expensive to fit with any luxury brand’s high-end prices. For example, a Louis Vuitton monogrammed mink-fur sleep mask — perfect for catching some shuteye on that first-class flight — costs 700 pounds ($859).The danger is that luxury groups would be seen as profiteering from a health-care emergency. What’s more, according to consultants at McKinsey & Co., consumers shift to more subtle “silent luxury,” rather than in-your-face bling, after a large-scale crisis with a heavy emotional toll. What is perceived as unethical behavior — or simply ugly consumerism — could turn off customers, especially younger shoppers who are particularly conscious of brands’ social values.One way to get around this would be to give a percentage of the profits to good causes, or to donate one mask for every one sold. J. Crew has donated 75,000 single-use masks to Montefiore Health System hospitals in New York.Even if the pitfalls around profiteering are surmounted, there are other perils. Luxury is about feeling good. Brands must weigh whether they want to be associated with a pandemic and its huge human and economic toll. And although masks can have replaceable filters that extend their use, it’s unlikely people will hold onto them for long. Being disposable is anathema to luxury goods, from Hermes handbags to Cartier watches, for which heritage is crucial.That doesn’t mean face coverings won’t work for some brands. For example, Off-White, the streetwear label from DJ and designer Virgil Abloh, who is also the artistic director for Louis Vuitton’s menswear, has been producing masks for some time. Off-White’s $95 arrow-logo face mask was the most in-demand men’s fashion item in the first quarter, according to the Lyst index, which measures clothing and accessories searches on its own site, Google and other social media.Streetwear masks, along with heavy boots and multi-pocket coats, are part of an apocalyptic look that began to emerge before Covid-19. Serving to partly conceal one’s identity and repel other urban hazards like pollution, masks are a good fit with younger, edgier brands, such as the aptly named Anti Social Social Club. That’s not the case for traditional luxury.Consequently, the big fashion houses would be better off focusing their attention on items that can be accessorized with masks, or adapting products to changing needs. Luxury resale site Vestiaire Collective saw a 45% increase in orders for scarves, including Hermes’s classic silks, in the last week of March, compared with the previous seven days, and demand has remained elevated. Brands could experiment with supersized sun visors to ensure social distancing or extended collars that could double as face coverings.As the world emerges from the pandemic, and things become less emotionally charged, consumers may give luxury brands more permission to sell them protective clothing. For now, any move to do so will likely be a one-off to grab attention on the catwalk or Instagram. The pop star Billie Eilish, for one, donned a Gucci custom double-G-emblazoned mask for the Grammy Awards in January. While Gucci’s decision not to commercialize the product means passing up millions of euros of sales, it’s the right call. 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.
Given that widespread uncertainty in the stock market is likely to endure for the rest of 2020 and beyond, it pays to know that you're investing in high-qualit...
Paris, May 20th, 2020On May 19th, 2020, in accordance with article 4.6 of AMF decision n° 2018-01 dated July 2nd 2018, LVMH reduced the cash amount allocated to the liquidity contract entered into with ODDO BHF SCA by 278,000 euros in order to bring the total amount allocated to this contract down below the €50 million threshold referred to in the AMF decision for “very liquid shares” (as defined in paragraph 3.a of article 4 of the decision).Following this operation, on May 19th, 2020, the following assets appeared on the liquidity account: * 47,000 shares * 32,675,439.73 euros in cashLVMH LVMH Moët Hennessy Louis Vuitton is represented in Wines and Spirits by a portfolio of brands that includes Moët & Chandon, Dom Pérignon, Veuve Clicquot Ponsardin, Krug, Ruinart, Mercier, Château d’Yquem, Domaine du Clos des Lambrays, Château Cheval Blanc, Colgin Cellars, Hennessy, Glenmorangie, Ardbeg, Belvedere, Woodinville, Volcán de Mi Tierra, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Cape Mentelle, Newton, Bodega Numanthia and Ao Yun. Its Fashion and Leather Goods division includes Louis Vuitton, Christian Dior Couture, Celine, Loewe, Kenzo, Givenchy, Pink Shirtmaker, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Nicholas Kirkwood, Loro Piana, RIMOWA, Patou and Fenty. LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Perfumes Loewe, Benefit Cosmetics, Make Up For Ever, Acqua di Parma, Fresh, Fenty Beauty by Rihanna and Maison Francis Kurkdjian. LVMH's Watches and Jewelry division comprises Bvlgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred and Hublot. LVMH is also active in selective retailing as well as in other activities through DFS, Sephora, Le Bon Marché, La Samaritaine, Groupe Les Echos, Cova, Le Jardin d’Acclimatation, Royal Van Lent, Belmond and Cheval Blanc hotels.LVMH CONTACTSAnalysts and investors Chris Hollis LVMH \+ 33 1 4413 2122 Media Jean-Charles Tréhan LVMH \+ 33 1 4413 2620 MEDIA CONTACTS France Brune Diricq / Charlotte Mariné Publicis Consultants + 33 1 44 82 47 20 France Michel Calzaroni / Olivier Labesse / Hugues Schmitt / Thomas Roborel de Climens DGM Conseil + 33 1 40 70 11 89 Italy Michele Calcaterra, Matteo Steinbach SEC and Partners + 39 02 6249991 UK Hugh Morrison, Charlotte McMullen Montfort Communications + 44 7921 881 800 US James Fingeroth, Molly Morse, Anntal Silver Kekst & Company + 1 212 521 4800 China Daniel Jeffreys Deluxewords +44 772 212 6562 Attachment * Reduction of the liquidity contract - May 2020
(Bloomberg Opinion) -- Put the revenge shopping on hold.With Chinese consumers returning to top-end boutiques, it would be tempting to think that the luxury industry will bounce back quickly as coronavirus lockdowns ease. But on Friday, watch and jewelry maker Richemont provided a sobering assessment of the prospects in the pandemic era for the bling behemoths.Chairman Johann Rupert warned of up to three years of “grave economic consequences,” as the owner of the Cartier brand reported a 22% fall in operating profit in the year to March 31. He described the current crisis not as a pause, but a reset. That assessment is a lot more downbeat than those provided by the likes of rivals LVMH Moet Hennessy Louis Vuitton SE and Gucci-owner Kering SA.Some of the difference may be because about 70% of Richemont’s sales come from watches and jewelry, often among the most expensive items on any luxury wish list. When shopping for revenge with the coronavirus’s economic costs still pilling up, a $2,000 handbag may be higher up the list of priorities than a $10,000 watch.It’s only when true discretionary spending returns that Richemont will benefit from its efforts to clean up its watch business after an excess of Cartier, Panerai and IWC models risked hurting its brand appeal. The company has a strict rule that it doesn’t supply more watches to boutiques than are being sold. Still, with exports of Swiss timepieces already feeling the pain, plus the high fixed costs in watchmaking, Richemont’s caution here is justified.But there seem to be some reasons for optimism too.Richemont has been building a powerful digital business, positioning it to benefit from a surge in online shopping as consumers shy away from returning to malls and department stores. In 2018, the company paid $3.3 billion to take full control of the high-end luxury platform Yoox Net-a-Porter; purchased the Watchfinder website; and formed a joint venture with Alibaba Group Holding Ltd., the titan of Chinese e-commerce.Online transactions accounted for about 12% of global luxury sales in 2019, according to Bain & Co. estimates. But that could rise to about 30% by 2025. It’s true that during the lockdowns Yoox Net-a-Porter, known as YNAP, was hurt by warehouse closures and the division still needs to make a profit. But as competitors seek to prosper in this market, Richemont’s digital proposition could become an interesting acquisition target too.Meanwhile, Richemont halved its divided, to 1 Swiss franc. While it had net cash of 2.4 billion euros, it decided to prioritize prudence. However, it is also considering giving shareholders the option to buy shares at a future date, at the price when the dividend was declared. While the company has yet to work out the details, that implies that management believes conditions will eventually get better. There would be little upside for loyal investors otherwise.Still, shareholders seem to be taking Rupert’s downbeat assessment to heart. The stock fell about 3% on Friday. On a forward price-to-earnings basis, it trades at a significant discount to the Bloomberg Intelligence top luxury peer group.Richemont typically takes a long-term view. Its perspective on the Covid-19 pandemic looks no different. The upside is that it may transform the YNAP deal, which was a rare strategic flip-flop for the group, into a prescient purchase.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.
Global sales of luxury goods are expected to slump by 50% to 60% in the second quarter even as some countries begin to ease coronavirus lockdowns and despite signs of recovery in the Chinese market, consultancy Bain said on Thursday. The coronavirus crisis, which first hit China late last year before spreading to Europe and the United States, has kept shoppers at home and forced retailers to shut stores, resulting in a crushing halt to a decade of spectacular growth for high-end brands. With the April to June decline coming on top of an estimated 25% drop in the first three months of the year, Bain expects global sales of luxury handbags, clothing and cosmetics to shrink by between 20% and 35% in 2020, against a previous estimate for a 15% to 35% decline.
The stock market volatility caused by the COVID-19 pandemic is likely causing investors to consider "selling in May and staying away" until the crisis ends. The U.S. certainly seems to be in a tough spot right now, with high unemployment rates, delayed stimulus payments, virus misinformation, insufficient testing and containment measures, and political gridlock. Today I'll highlight three resilient international stocks investors should consider buying in the dreaded month of May.
(Bloomberg Opinion) -- As the coronavirus pandemic continues, Bloomberg Opinion will be running a series of features by our columnists that consider the long-term consequences of the crisis. This column is part of a package envisioning a new consumer economy. For more, see Mary Duenwald on technology changing how we shop and on how consumers respond to crises, and Tara Lachapelle on fixing the broken business model of streaming.During the coronavirus lockdown, a particular meme has been doing the rounds on Instagram and Twitter.It shows a woman in a pink ballgown, complete with tulle train billowing out behind her. She’s not reaching for a cocktail or standing on a glitzy red carpet. She is in a supermarket produce section, clutching a bunch of carrots in one hand and reaching for a red pepper with the other.The image encapsulates how some consumers feel: After being cooped up at home for months, they can’t wait to finally have an opportunity to get all dressed up again.But for many others, what they wear, how they shop and which products they buy will be forever altered by the pandemic. The Covid-19 outbreak, which has tragically infected more than three million people and killed more than 219,000, has also struck at the heart of consumerism around the world.With a quarter of a million stores closed across the U.S. at the height of the lockdown, according to research group GlobalData, the ability to purchase, long a symbol of affluence and status, is in peril. Never has materialism seemed so emasculated.First of all, there’s the immediate economic impact. With millions of workers temporarily furloughed and laid off, they will be reining in their spending. If these become permanent job losses, the effect will be even more severe. Conspicuous consumption is going to look ugly for a while.And habits learned in lean times often stick around. Witness the acceptance of discount retailers, such as the German no-frills supermarkets Aldi and Lidl. The cash-strapped middle classes in the U.S. and Europe discovered the delights of their cheap wine and value toilet paper during the 2007-2008 global financial crisis, and the budget grocers have prospered ever since.Then there’s the slow and incremental process of coming out of lockdown. Even individuals who have kept their jobs and full salaries may make longer-term changes to their spending, as it will be some time before they feel comfortable visiting crowded malls and dining out in restaurants again.With social distancing potentially staying in place for up to two years, according to KPMG, this could mean far-reaching consequences for the operation and physical design of stores. For example, stores might have to require appointments for visits, offer more check-out free locations and even rethink facilities such as changing rooms. Who wants to pick up discarded garments when the world is emerging from a pandemic?So far, there are some encouraging signs coming from China, where consumers emerging from lockdown seem to be embracing shopping once more. PwC estimates that as of early April sales at non-food retailers were at 50-80% of their pre-crisis levels. In luxury, the recovery has been even more extreme: A Hermes International flagship store took in $2.7 million when it reopened in Guangzhou in mid-April, believed to be a record daily haul for a boutique in China, according to fashion trade bible WWD. LVMH said some of its big brands on the mainland had seen 50% increases in sales in April compared to the previous year.This phenomenon is being called “revenge spending,” a phrase first coined to capture the desire for consumer goods unleashed in China during the 1980s, after the poverty and chaos of the Cultural Revolution. At the moment, Chinese shoppers are flush with cash after cancelled travel and events. However, this demand may not last, especially as the number of people allowed in boutiques at any one time is limited and initiatives such as temperature testing have been put in place.The bigger impact of this crisis, then, may be a shift in what consumers choose to buy.*****The outbreak has hit something we largely take for granted: our health. While more government resources are directed to healthcare — something that will have implications for taxes and disposable incomes — there will also likely be a reassessment of personal priorities. That could mean spending even more of one’s income on private health insurance or buying products that help boost immunity.Wellness had already become one of the few rich seams for consumer groups, giving rise to Beyond Meat Inc.’s plant protein burgers, South Korean gold-laced face masks and vitamin infusions sold in upmarket department stores. Despite criticisms that so-called self-care is the expensive preserve of millennial hipsters, society’s desire to ensure it doesn’t get sick will likely turbo-charge demand for these products.The pandemic has also fostered a renewed sense of community. This plus the inability to travel very far could encourage spending in more local shops and on brands with strong regional identities, as opposed to the big retailers who may have had empty shelves or struggled to deliver online orders during the crisis. Underlining the new mood, one British retailer with a long history of trading on the high street told me they’ve even noticed more customers saying thank you to staff in their daily interactions. One sector that is poised to suffer tremendously going forward is clothing. Most consumers have effectively skipped a fashion season, being unwilling or unable to buy apparel for spring and summer. Conferences, parties and weddings have been cancelled, so we’ve simply needed fewer new clothes. There may be some pent-up demand when consumers rediscover their freedom, especially if retailers are having to cut prices to clear stock. But for many, essential grooming such as getting a haircut or a fresh set of eyelash extensions will take precedence over buying a new outfit.Some consumers who bought fewer clothes during this period may continue to reduce their wardrobe spend. The size of the average U.S. closet has already shrunk over the past three years, according to GlobalData. If you combine the pandemic and concerns about fashion’s environmental cost, it’s not hard to see how men and women may buy even less apparel in the future.During the prolonged shutdown, there will be some retailers that consumers simply don’t miss and therefore may not return to. U.S. department stores, such as Macy’s Inc. and J.C. Penney, already grappling with the shift toward online buying and with few compelling products, may well fall into this category. J.C. Penney skipped a $12 million interest payment and is evaluating alternatives including a potential bankruptcy filing to restructure its finances, Reuters reported recently. Macy’s, meanwhile, is exploring ways to use its real estate to secure fresh cash. Indeed, some storied names may shut their doors forever, or decide that the time is right to close a number of locations. How brands behave when the chips are down will also determine how customers react to them when they come out of lockdown.Some have acted particularly well, adapting their offerings to meet changing needs. For example, luxury goods groups, including LVMH, Kering SA, Prada SpA, Burberry Group Plc and Ralph Lauren Corp, repurposed their facilities to produce protective equipment such as hand sanitizer, masks and gowns. Brands like Nike and Lululemon have engaged shoppers with online workouts; while British clothing and food retailer Marks & Spencer Group Plc. has offered meditation sessions. This nimbleness won’t be forgotten.*****Whether out of necessity or choice, shoppers will want goods that are appealing — and, after a health scare, make them feel good — but are priced at a level they believe is appropriate. This doesn’t always mean the cheapest, but it does mean a perceived sense of good value for money. That’s at odds with the approach of higher initial prices followed by steep markdowns that has become a hallmark of much U.S. retail. But as customers become more discerning, store groups will need to distinguish themselves with more than just discounts.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.
Paris, April 30, 2020LVMH Moët Hennessy Louis Vuitton announces the availability of its 2019 Universal Registration Document, in accordance with applicable regulations. The French version of this document was filed with the “Autorité des Marchés Financiers” (AMF) on April 29, 2020 under the reference D.20-0406. The English translation of this document may be consulted in the Publications section of the Company’s website (www.lvmh.com). This document includes in particular:\- the annual financial report; \- the report of the Board of Directors on corporate governance; \- the statutory auditors’ reports \- the statement of auditors’ fees; \- the description of the stock repurchase program.Attachment * Mise a disposition URD 2019 VA
* HSBC, UBS, Santander: mixed Q1 results 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 (email@example.com), Joice Alves (firstname.lastname@example.org) and Julien Ponthus (email@example.com) in London and Stefano Rebaudo (firstname.lastname@example.org) in Milan. There's been quite a lot written about pasta and flour stockpiling but piling up stocks during the worst economic and financial crisis in living memory is an interesting one!
* HSBC, UBS, Santander: mixed Q1 results 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 (email@example.com), Joice Alves (firstname.lastname@example.org) and Julien Ponthus (email@example.com) in London and Stefano Rebaudo (firstname.lastname@example.org) in Milan.
(Bloomberg Opinion) -- It’s looking decidedly somber out there for the world’s favorite sparkly stone.Diamonds were ailing even before the coronavirus came along. Now, weeks into lockdowns in the U.S. and elsewhere, all but the largest diggers, polishers and retailers are struggling for cash. Unable to sell its stones, Dominion Diamond Mines, the miner that sold luxury brand Harry Winston to Swatch Group AG in 2013, filed for insolvency protection late Wednesday. Anglo American Plc’s De Beers cut 2020 production guidance by a fifth Thursday, in line with demand.To secure their future, diamond giants may need a rebranding akin to the storytelling feat pulled off by Harry Oppenheimer, the late De Beers chairman who cultivated the engagement ring to overcome a slump after the Great Depression. In so doing, he forged a tradition that fueled sales for decades. Today, a refreshed myth-making effort could target the post-pandemic concerns of millennial consumers: marketing the diamond as a store of value in volatile times comparable to art, which is also authentic, traceable and sustainable.Since 2011, when prices peaked thanks to China’s new shoppers, diamonds have faltered. Lab-grown stones, initially priced confusingly close to the real thing, posed a challenge. To make things worse, a supply glut hit the market, pushing producers to cut prices. A 26-million-carat increase in 2017 was the largest single-year volume addition since 1986, according to consulting firm Bain & Co. Meanwhile, financing availability shrank dramatically as traditional lenders pulled away. A 2018 fraud scandal involving celebrated Indian jeweler Nirav Modi didn’t help. The coronavirus will accelerate some developments that aren’t unwelcome. In supply terms, the industry may look healthier if older or more marginal mines are obliged to stop digging. Rio Tinto Group last year had already announced the 2020 closure of its Argyle mine, which produces both low-quality gems and fabled pink diamonds, taking some 13 million carats out of global annual production of just over 140 million. The current crisis will add to that. In March, Dominion stopped work at its Ekati mine in Canada, and other pits have been closed or are working only partially. Not all will return.There will be a shakeout among polishers and perhaps more integration in some parts of the industry, of the sort demonstrated by Louis Vuitton’s purchase earlier this year of the largest rough diamond since 1905. Sales of rough and polished stones will change too, as travel restrictions in South Africa, Botswana and India push more deals online. It’s a remarkable feat for a conservative industry that thrives on face-to-face interaction, and arcane systems like De Beers’ “sights,” as its regular sales are known.Yet the scale of this health crisis, rapidly turning into an economic cataclysm, has also made other problems far worse. India’s polishers are not only strapped for credit, but also struggling with a weaker rupee, lockdowns and curfews; Thousands of workers have been forced to leave hubs like Surat altogether. Elsewhere, both diamantaires and jewelry buyers are stuck at home, making it harder to clear excess inventory. The flow of diamonds has dwindled to barely a trickle.The real concern is demand, where a grim outlook for disposable incomes suggests a hoped-for 2020 recovery is impossible, even as supply shrinks. The very top of the market may be insulated, but further down even China’s “revenge purchases” aren’t going to be enough. As my colleague Nisha Gopalan has pointed out, such splurges won’t save luxury products — especially if U.S. job losses continue to pile up. Inventory could flood the market, too.All this upheaval does makes it a good time to rethink the storytelling behind diamonds, though. Coordinated marketing, once the industry’s go-to solution, will need to make a comeback as consumers emerge from the wreckage of coronavirus. Post-pandemic values may change broadly.Three things could be highlighted. First, a store of value for the long term, especially for the largest gems where prices vary less. Like art, or fine wine, only wearable. Better yet, to appeal to the millennials that make up its consumer base, the industry can promote the stones’ authenticity, building on existing work around provenance and traceability, dating back to the Kimberley Process, the multilateral system aimed at ensuring the proceeds of diamond mining aren’t used to fund conflict. The industry is also sustainable, with relatively clean, chemical-free processes.Marketing spend has recovered after a dip in the past decade, but coordinated industry expenditure remains far below even the early 2000s. While the likes of De Beers and Alrosa PJSC may be reluctant to sponsor cash-strapped smaller rivals, it would be money well spent. Nearly seven decades after Marilyn Monroe’s immortal song, it's time for a new myth.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.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 Opinion) -- Will fashionistas embrace ostentatious outfits and logo-heavy handbags with as much gusto as the coronavirus crisis unfolds?This is a question that all luxury groups must grapple with. But it’s an especially pertinent one for Gucci, the superstar brand owned by luxury behemoth Kering SA. Gucci has had nothing short of a miraculous turnaround under creative director Alessandro Michele, who embraced maximalism in everything from shoes to streetwear, setting fashion on a whole new aesthetic course.Consumers may shy away from the most conspicuous consumption with hospital staff risking their lives on the front lines of the Covid-19 battle. Especially as the pandemic shines a harsh light on how poorly paid essential workers are, from nurses to supermarket cashiers, making very showy purchases look out of place.Add in the fact that in leaner times, luxury tends to become more discreet and that’s a worry for those brands that have made the logo, such as Gucci’s double G, a key element of their look.Late on Tuesday, Kering said Gucci’s sales excluding currency movements, acquisitions and disposals fell by 23.2% in the three months to March 31. Shares in Kering fell as much as 6.9% on worries that the brand, which has so far proved remarkably resilient, is finally losing momentum. By contrast, French archrival LVMH, owner of Louis Vuitton and Dior, saw its fashion and leather goods sales in the quarter decline by a better-than-expected 10%.Gucci has obviously been hurt by the disruption to the Chinese market, where Covid-19 first struck. The brand generates 37% of its sales from Asia, but it is particularly popular in China, with millennials sporting Gucci T-shirts (not always the real thing) and carrying immediately distinctive handbags like the Dionysus with its snake clasp.Before the outbreak, Kering said Gucci had enjoyed strong demand in all markets, and it faced a difficult comparison with the year earlier period when comparable sales had surged an impressive 20%. The division was also hurt by the temporary closure of its production facilities in Italy, where the pandemic first hit hard in Europe.There is good news in Chinese shoppers flocking back to their local Gucci stores since they reopened. The brand returned to positive sales growth in China in April, and was leading Kering’s revival there. But as my colleague Nisha Gopalan has noted, the pent up demand unleashed after the lockdown may not last, particularly if the country’s slowing economy starts to affect luxury goods buyers’ spending. Meanwhile, continued store closures in the U.S. and Europe, and the absence of Chinese tourists once they reopen, will mean that sales elsewhere remain subdued.The prospect of shifting tastes layers another concern on top of the immediate dislocation from the virus.Michele has already toned down the look, but the Gucci logo is still prevalent. He may need to streamline it further to tune into the new mood, as well as keep designs fresh. The same goes for Kering’s smaller Balenciaga brand, whose recent success has been built on streetwear emblazoned with its name. Still, Kering is well placed in that it has historic French fashion house Yves Saint Laurent, which is more subtle. Another holding, Bottega Veneta, is the epitome of discreet luxury. The house best known for its woven leather handbags is enjoying a renaissance under its new creative director Daniel Lee, whose minimalist designs have already struck the right note with top-end buyers. Bottega Veneta’s underlying sales rose 8.5% in the first quarter.But right now, Gucci is Kering’s powerhouse, accounting for 61% of group sales and 83% of operating profit in 2019. Up until Tuesday’s close, shares in Kering had fallen about 16% this year, outdoing the MSCI Europe Textiles, Apparel and Luxury Goods Index. But if the Gucci story looks like it’s starting to fray, that performance could be tested.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.
It hasn't been the best quarter for LVMH Moët Hennessy - Louis Vuitton, Société Européenne (EPA:MC) shareholders...
(Bloomberg Opinion) -- China’s high-end consumers aren’t going on a “revenge spending” spree. They’re just bringing their love affair with luxury brands home. A surge in China sales for stores operated by the likes of LVMH and Hermes International has spurred optimism that consumer demand will snap back as the lockdowns lift. The reports offered a glimmer of light amid data showing that China’s retail sales plunged 15.8% in March from a year earlier.Unfortunately, it looks as though Chinese consumers are simply buying their alligator handbags and diamond watches at home instead of in Hong Kong, Paris or Milan. While travel restrictions aimed at halting the pandemic are partly responsible, the trend was already in place before the virus appeared — driven by a change in tax rates.Beijing has been encouraging the nation’s shoppers, who accounted for around a third of global luxury sales last year, to spend more money at home. The gap between prices of upscale goods onshore and overseas shrank to 15% last year from about 30% three years ago after a series of cuts to China’s luxury sales taxes. Protests last year in Hong Kong, a favorite pit-stop for buyers of high-end products, also helped to spur domestic sales. The migration still has a long way to run: Only 30% of China’s luxury purchases took place at home last year.All this suggests that this spurt in luxury sales is unlikely to be sustained at these levels. Chinese purchases won’t rescue the sector globally, as my colleague Andrea Felsted has noted. More than 90% of sales take place in bricks-and-mortar stores. That’s understandable: If you’re going to spend thousands of dollars on a handcrafted item, you’ll want to touch it, rather than just clicking a button on an e-commerce site. Besides, Chinese shoppers are still worried about their jobs and the prospect of salary cuts. Most people don’t plan to increase spending on high-end goods, according to a Morgan Stanley survey that suggests the uptick reported by LVMH, Hermes and L’Oreal SA may quickly fade. Of 2,000 consumers surveyed, 29% said they will spend less on luxury goods next month versus this month, while 40% said they would spend more on groceries. The survey covered city-dwellers aged 18 to 49 in 19 provinces.The luxury sales bounce will taper off into a gradual though sustainable rise, according to Lucia Li, a Beijing-based partner at Bain & Co. The consultancy divided Chinese consumer products into six categories ranked from those that will gain a permanent boost from the coronavirus, such as digital healthcare, to those that will face enduring headwinds such as traditional retailers. It placed luxury goods in the middle bracket, along with alcohol and household appliances.China will need to look elsewhere for its economic revival. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.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.