Bloomberg reports that in a response to France's plans to start taxing US-based tech companies, which were the result of failed EU-US negotations a month ago when the US representative walked out, the US is now planning to impose a 25% tax on luxury (especially handbags) and beauty products imported from France. The total value of the goods listed by the US Trade Representative's website, Bloomberg reports, amounts to roughly 1.3 billion US$.
Beleaguered by the unprecendented challenges now dragging on for nearly a year, luxury brands have started throwing in the proverbial towel on their Russel Street shops in Hong Kong’s bustling Causeway Bay, considered the world’s most expensive shopping street. "Already struggling for survival after months of civil unrest crippled Hong Kong’s economy," writes Pearl Liu for the South China Morning Post, "the final blow for many came this year with the coronavirus pandemic, which killed off any remaining consumer sentiment."
Consumers across Asia are rushing to luxury stores to buy luxury items before an expected price hike. After Louis Vuitton raised prices last week - the third price hike in 2020, many consumers expect other brands like Chanel, Dior and Gucci will follow suit. Higher prices are one strategy to make up for losses caused by the COVID-19 pandemic, Jing Daily reports.
Across Asia, thanks to pent-up demand and the inability for shoppers to travel and buy luxury goods abroad, the luxury market has seen growing in-store traffic and sales.
Daniel Langer, consultant for some of the world's leading luxury brands, in an article in Jing Daily says that despite our intuition - people spend and will spend less on luxury in and after a crisis - the luxury segment is more resilient than others.
LVMH Moët Hennessy Louis Vuitton recorded revenue of 10.6 billion euros (11.5 billion dollars) for the first quarter of 2020, down 15 percent compared to the same period in 2019 and down 17 percent on an organic basis. The group says that with these results, LVMH "has proven its ability to be resilient in an economic environment disrupted by a serious health crisis that has led to the closure of stores and manufacturing sites in most countries in recent weeks, as well as the suspension of international travel."
Five major watch brands, Rolex, Patek Phiippe, Tudor, Chanel and Chopard today announced they will be leaving BaselWorld. The exit follows a letter by Rolex topman Hubert du Plessix pleading for a refund for the brands set to participate in the canceled 2020 edition. In a joint statement, the brands announced they plan to start a new show, which remains unnamed, scheduled for April 2021, in conjunction with the organizers of Watches & Wonders (FHH).
The Hermès flagship store in Guangzhou reportedly made $2.7 million on its reopening day, boosting hopes on increased consumers' luxury shopping once quarantine measures are lifted. Many hope that the so-called "revenge spending", with people purchasing luxury goods to treat themselves after being in isolation for weeks, signals the recovery of luxury spending, although some fear it could be no more but a "one-off" shopping spree.
According to Swiss newspaper “Le Temps” the world’s largest luxury watch and jewelry show, Baselworld, is in danger of becoming extinct. The newspaper cites from a leaked letter from angry exhibitors, who are threatening to turn their backs on the fair for good, if they aren’t reimbursed fully for costs already made for this year’s – canceled due to the COVID-19 pandemic – edition. According to the article, the exhibitors were offered a financial agreement which they believe is inadequate and they demand a full refund.
In their latest report Bain & C° takes a deeper look into the effects of the COVID-19 pandemic on the luxury segment. A few key take-aways;
Tiffany & Co. shareholders voted in favor of the jeweler’s acquisition by LVMH during a meeting held on February 4 at its Fifth Avenue headquarters, the companies announced in separate press releases. LVMH Moët Hennessy Louis Vuitton, the world’s largest luxury goods company, announced on November 25, 2019 that it had reached an agreement to buy the jeweler Tiffany & Company in a $16.2 billion deal, the largest ever in the luxury sector. According to the agreement, LVMH will acquire Tiffany, the global luxury jeweler, for $135 per share in cash.
Swiss luxury jeweler de Grisogono, whose long-alleged history of shady deals with Angola was recently exposed by the International Consortium of Investigative Journalists (ICIJ) and 36 media partners, has filed for bankruptcy in Geneva, according to multiple news outlets. The jeweler is owned in part by the husband of Isabel dos Santos, the billionaire daughter of former president José Eduardo dos Santos, who is facing allegations of having pilfered Angolan state-owned companies. The company owes more than 1.4 million francs to its Swiss suppliers and is facing insolvency.
Richemont Group's sales in Q3 (the three month period ended 31 December 2019) increased by 4%, with growth in all regions except Japan, the luxury goods group announced last week. The Jewellery Maisons division recorded a 6% increase year-over-year at constant exchange rates versus the prior period and 9% at actual exchange rates. Sales in Europe during the period grew by 9% to €1.26 billion ($1.40 billion) benefiting from favourable comparative numbers and strong sales in most markets. European sales for the nine months of the fiscal year have risen 8% to €3.5 billion ($3.9).
Lucara, the Canadian mining company that owns the Karowé mine in Botswana announced they will be collaborating with luxury brand Louis Vuitton and an Antwerp-based high-end polishing company (HB) to polish the largest rough diamond ever found in Botswana, the 1758ct Sewelô diamond recovered in April last year. In the arrangement, the stone - qualified as near-gem, variable quality, will be polished into a collection of diamonds, and apart from an up front non-material payment, Lucara will retain a 50% interest in the polished results.
Tiffany & Co. has asked luxury conglomerate LVMH to raise its $14.5 billion acquisition offer, arguing that it significantly undervalues the U.S. jewelry chain, Reuters reports, citing unnamed sources. Last week, it became known that LVMH Moët Hennessy Louis Vuitton is seeking to add the iconic U.S. jeweler to its portfolio of upscale brands.
Tiffany & Co. has received a takeover approach from LVMH Moët Hennessy Louis Vuitton, which is seeking to add the iconic U.S. jeweler to its portfolio of upscale brands. The French company sent Tiffany officials a letter in the past couple of weeks outlining an all-cash takeover bid of about $120 a share, according to people familiar with the matter. That would value Tiffany at close to $14.5 billion, and represents a 22% premium over the stock’s closing price on Friday, according to the Financial Times.
Last week, Tiffany & Co. found itself at the center of a social media firestorm after posting an image on Twitter of a woman covering one eye with her hand, leading to accusations that the jeweller supports the Hong Kong protesters and prompting Tiffany's to remove the post. Angry Chinese consumers believed it deliberately evoked a symbolic pose adopted by Hong Kong’s pro-democracy demonstrators after a woman was shot in the eye with what protesters say was a police beanbag round during violent clashes with police. Her image later popped up in many posters and memes.
The impact from the Hong Kong protests is spreading to global luxury retailers, with jewelry - including Swiss watches - taking a hit as shoppers and big-spending travelers stay away. Unrest has forced many stores to close and sparked widespread social disruption. Luxury brand Richemont - which owns several of the world's leading luxury goods companies including Cartier, Piaget, Van Cleef & Arpels and Jaeger-LeCoultre - is the latest firm to say its business is being impacted by the ongoing protests.
LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded revenue of €46.8 billion in 2018, an increase of 10% over the previous year. LVMH's results have upset prevailing wisdom about the health of China’s shoppers with its latest results. The luxury bellwether, which owns some of the world’s most valuable brands including Christian Dior and Givenchy, said Tuesday that demand from Chinese consumers strengthened in the three months through December, defying analysts' expectations for a decline in luxury spending.
Brands need to be concerned about over-sentimentalizing peoples’ relationships with diamonds as a representation of love. The American middle class is much weaker today than it was when De Beers came out with their famous ‘Diamonds are forever’ campaign. And with diminished purchasing power, consumers are more willing to look into alternative choices for rings, making lab-grown diamonds and gemstones more attractive.
Farfetch (FTCH), the London-based luxury fashion e-tailer, has just pulled off one of the largest IPOs of the year.
Swiss watch exports saw their strongest growth in more than five years during 2017, according to the Federation of the Swiss Watch Industry. with Hong Kong and mainland China representing the top two markets for Swiss watches. This trend continued to start off 2018, as January sales in Hong Kong rose 21.3 percent to grab a 15 percent of the market, while sales in mainland China surged by 44.3 percent to reach 10.9 percent of the market, overtaking the US.
Richemont, the second largest luxury goods company in the world, announced sales had jumped during the April-to-August period as a result of Asia's strong performance.
Costco owes Tiffany & Co. more than $19 million for selling 2,500 generic diamond rings falsely identified as "Tiffany" rings, a federal judge ruled Monday. Judge Swan ruled in favor of Tiffany, saying the brand was entitled to $11.1 million as profits for trademark infringement, plus interest, as well as an additional $8.25 million in punitive damages, which had been awarded by a jury in October. Costco was also permanently prohibited from using “Tiffany” as a stand-alone term when selling its products.
Luxury houses such as Cartier, Piaget and Chanel have launched collections on Net-a-Porter and are doing well, despite critics of the format. Cartier made a relatively risky move by placing Panthère de Cartier, a white gold diamond watch retailing for US$77,000 (HK$600,000) on the online platform Net-a-Porter. Within two weeks of the collection’s launch, the watch was sold. Of course some ‘purists’ believe that luxury products must be felt to create an emotional engagement, which is hard to replicate online.
Everlane’s founder, Michael Preysman, who sells classic designs over the internet by promising “radical transparency”, believes he has identified the issues Millennials have regarding provenance and price. He pledges low-cost, high-quality goods made in factories used by designer brands, thus making them more appealing to their consumers. Everlane has a studio in Soho, New York, where shoppers are encouraged to try on the products and then return home and purchase their goods online, an inventive way of combining retail and ecommerce.
Richemont, the second largest luxury goods company in the world, released its consolidated results for the financial year that ended 31 March 2017. Jewelry sales for the group - including Cartier and Van Cleef & Arpels - were up 7% to $4.55 billion, a growth considered rare for this section of the group’s portfolio. The report suggests the rise was partially offset by a weak watch division as watch sales dropped by 15% to $4.75 billion.
The De Beers Group made headlines last month when it announced the end of its joint venture with LVMH with the aquisition of their 50% share in De Beers Diamond Jewellers (DBDJ), a move that Chaim Even-Zohar characterizes as, "brilliant and long overdue." He writes, "With De Beers at the helm, the venture will get a realistic chance to succeed.
LVMH Moët Hennessy Louis Vuitton, the world's largest luxury producs group, recorded revenue of 9.9 billion Euros ($10.51 billion) for the first quarter 2017, an increase of 15%. Organic revenue (with comparable structure and constant exchange rates) growth was 13% compared to the same period of 2016, an increase attributable to all business groups.
With 850 million active users monthly, western luxury brands have been quick to embrace China’s “most important platform for luxury brands”, WeChat. Local and international brands have realised the potential of the platform to make them key players in China’s $103 billion jewelry market. Western companies have used it for flash sales as well as marketing and customer interaction. While these flash events have spurred sales, China’s online sales remain limited, says Antoine Pin, managing director of Bulgari in greater China.
"The organizers of Baselworld, the world’s largest watch and jewelry fair, have recognized that it is in a state of decline," writes Anthony DeMarco for Forbes. "At a time when the fair has reached the milestone of 100 years, fair organizers announced that they are reducing the 2018 edition by two days and cutting prices for exhibitors, following several years of exhibitor and attendance declines." The organization announced in a press release that visitor figures were down 4% to 106,000 buyers.
Organizers of the CARAT+ "Diamond Event" trade show to be held in Antwerp from May 7 - 9 have announced an agreement with "Bond Girl" Caterina Murino (Casino Royale, 2006) to be a guest of honor, and has announced an exclusive media partnership with The Rapaport Group. Murino, playing the sultry Solange Dimitrios, became the 71st member of one of the most celebrated and exclusive clubs in movie history, known as "the Bond Girls".
At the 2017 Geneva motor show Rolls-Royce will be presenting its most brilliant car to date. The Rolls-Royce Ghost Elegance is mechanically identical to the Ghost, the only difference being the paint which includes a powder originating from 1,000 ethically-sourced diamonds.
The price of the exclusive Rolls-Royce was not announced, however it will likely be a tad over the US$274,050 (£223,368) base price for a Ghost.
Forevermark, the diamond brand from the De Beers Group of Companies, has expanded to 2,000 retail outlets globally with the intention of expanding by an additional 10% this year, said CEO Stephen Lussier. The opening of the 2,000th Forevermark outlet, the Zen Diamond Anatolium store in the city of Bursa in Turkey, was followed by an announcement of a strong 2016. The brand spent US$85 million on consumer-facing marketing activities in 2016 to help stimulate global demand for diamond jewelry.
Russian mining giant ALROSA is stepping up its marketing game beyond its contributions to the Diamond Producers Association (DPA), we were told this past Wednesday at ALROSA Night - a joint initiative between the Antwerp World Diamond Centre (AWDC) and ALROSA at the Belgian Ambassador's Residence in Moscow.
Luxury brands are eager to cater to the desires of men as, “men are wearing more and more jewelry,” says Caroline Gaspard, founder of Akillis, a French-based jewelry brand which specializes in unisex jewelry. “The barriers are falling, and younger men are confident in expressing their own look.” Although the jewelry industry is still very much female-centric, brands are making headway by catering to men who are more fashion-forward and not afraid of expressing their individuality through jewelry.
LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, recorded a 5% increase in revenue, reaching $40.08 billion (€37.6 billion). With an organic revenue growth of 8%, Q4 saw an acceleration compared to earlier in the year. Europe, the Unites States and Asia, excluding Japan, remain well positioned and continued to show significant improvement. This slower demand in Japan and France was likely due to the continued decline in the number of tourists. The strongest performers included fashion and leather goods (+34%) and wine (+13%).
Sustainability has entered the mainstream in a signficant way, with young companies often making it a prime selling-point while well-known retailers, consumer products giants, and tech firms cater to consumers who increasingly care about sustainability.
"As consumer expectations lean increasingly toward transparency, a brand’s dedication to sustainable business practices is more important than ever before," write Jen King for Luxury Daily in her report on the “Sustainability is the New Black: Consumers Expect Ethical Transparency” session at Luxury FirstLook: Time for Luxury 2.0 on Jan. 18. She writes, "Panelists from the jewelry, spirits and hospitality sectors discussed how their businesses approach corporate social responsibility.