豪华品牌系列7：红场精品店

Luxury Brand MBA

When it comes to an appetite for luxury goods, few companies have been as acquisitive as LVMH Mo?t Hennessy Louis Vuitton, Richemont, and PPR, formerly Pinault-Printemps-Redoute. Not surprisingly, they are the world’s three largest luxury goods companies.


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But after the spending-spree of the late 1990s and early 2000s, not all of it successful, the big three luxury titans have switched from being strategic buyers to focusing on their existing portfolios, including selling some businesses.

That has opened the door to the deep-pocketed private equity funds. Eager to cash in on the buoyant market for luxury merchandise, they are prowling around the industry looking for deals.

“Private equity has so much money, they don’t know what to do with it,” says Gail Zauder, managing partner at Elixir Advisors, an investment bank specialising in luxury goods.

Many private equity funds slowed their investments after the dotcom bubble because of a poor economic outlook and illiquid public markets. Leverage for their deals was harder to obtain because of tight lending criteria.

Now, with a brighter outlook and more liquid stock markets, private equity funds are buying aggressively.

The entry of many hedge funds into the lending market also provides more sources of debt for their leveraged deals. And with strategic investors mostly focusing on their existing portfolios, the big private equity funds have this market mostly to themselves.

With lots of cash chasing a finite number of deals, the result is more auctions and expensive prices.

Private equity interest in the upscale sector comes at a time when luxury retailing is booming because consumers around the world have more spending power.

According to the latest Affluent Market Research Program, TNS Financial Services’ annual survey of the wealthy, published in November 2004, the number of US households with a net worth exceeding $1m rose 33 per cent to 8.2m in 2004, from 6.2m the previous year. That is the largest increase recorded in the study’s 23-year history.

The recent wave of interest by private equity firms in the luxury sector was fuelled last year when Jimmy Choo, the shoe brand worn by celebrities including Julia Roberts and Sarah Jessica Parker, sold a 51 per cent stake to private equity firm Hicks Muse.

In another deal, Trimaran Capital Partners, a New York private equity firm, and Kier Group, which makes private equity investments in lifestyle, luxury consumer products and retail businesses, bought a majority stake in Fortunoff, the fine jewellery and home furnishings retailer.

Now two prized names in luxury retailing

Finance and Investment

When it comes to an appetite for luxury goods, few companies have been as acquisitive as LVMH Mo?t Hennessy Louis Vuitton, Richemont, and PPR, formerly Pinault-Printemps-Redoute. Not surprisingly, they are the world’s three largest luxury goods companies.


ADVERTISEMENT





But after the spending-spree of the late 1990s and early 2000s, not all of it successful, the big three luxury titans have switched from being strategic buyers to focusing on their existing portfolios, including selling some businesses.

That has opened the door to the deep-pocketed private equity funds. Eager to cash in on the buoyant market for luxury merchandise, they are prowling around the industry looking for deals.

“Private equity has so much money, they don’t know what to do with it,” says Gail Zauder, managing partner at Elixir Advisors, an investment bank specialising in luxury goods.

Many private equity funds slowed their investments after the dotcom bubble because of a poor economic outlook and illiquid public markets. Leverage for their deals was harder to obtain because of tight lending criteria.

Now, with a brighter outlook and more liquid stock markets, private equity funds are buying aggressively.

The entry of many hedge funds into the lending market also provides more sources of debt for their leveraged deals. And with strategic investors mostly focusing on their existing portfolios, the big private equity funds have this market mostly to themselves.

With lots of cash chasing a finite number of deals, the result is more auctions and expensive prices.

Private equity interest in the upscale sector comes at a time when luxury retailing is booming because consumers around the world have more spending power.

According to the latest Affluent Market Research Program, TNS Financial Services’ annual survey of the wealthy, published in November 2004, the number of US households with a net worth exceeding $1m rose 33 per cent to 8.2m in 2004, from 6.2m the previous year. That is the largest increase recorded in the study’s 23-year history.

The recent wave of interest by private equity firms in the luxury sector was fuelled last year when Jimmy Choo, the shoe brand worn by celebrities including Julia Roberts and Sarah Jessica Parker, sold a 51 per cent stake to private equity firm Hicks Muse.

In another deal, Trimaran Capital Partners, a New York private equity firm, and Kier Group, which makes private equity investments in lifestyle, luxury consumer products and retail businesses, bought a majority stake in Fortunoff, the fine jewellery and home furnishings retailer.

Now two prized names in luxury retailing

豪华品牌系列3：巴黎商贩说中文

When Paris vendors learn to speak Mandarin

To find early evidence of the way Chinese tourists are changing the face of Europe, one need go no further than the Eiffel Towel.


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The unofficial trinket salesmen who hassle anyone with a camera slung over their shoulder have already added a dash of Mandarin to their multilingual repertoire of beckonings.

With the easing of state-imposed travel restrictions, Chinese tourism is also becoming an increasingly significant source of growth for western luxury goods companies.

Last December, Goldman Sachs estimated that the Chinese accounted for about 12 per cent of luxury goods industry sales, the vast majority of that coming from travel purchases, particularly those made in Hong Kong.

Overall, it reckoned that the Chinese slice of the luxury goods market

豪华品牌系列：精品业洗牌

Second Adam Jones piece

When Christian Lacroix displayed his 2005 couture collection in late January, it had been known for days that his patron, Bernard Arnault, was in the process of cutting him loose.


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That very evening, LVMH, the group controlled by Mr Arnault, confirmed that it had sold the business that bears Mr Lacroix’s name to a duty-free retail group owned by three American brothers, Simon,Jerome and Leon Falic.

The sale of the unprofitable fashion house was seen as evidence that the luxury goods industry was becoming more ruthless in focusing on its biggest, most lucrative brands.

However, the sale of Christian Lacroix could also be seen as emblematic of a more hopeful trend