2. 28th
to 5th
of May 2014
2
From:
TIMMINT Market Intelligence
To:
Whom it may concern
Subject:
Weekly Report, Luxury industry
Issue Year 2014, Week 18
Report Sections
Global Luxury News
Stock Market Performance
Companies Stock Charts
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4. 28th
to 5th
of May 2014
4
Purveyors of luxury goods have one eye set on
Africa
AFRICA’s fast-growing emerging markets provide "great" potential for purveyors of luxury goods, London-
based Euromonitor said in a "webinar" (online seminar).
Swaying the continent’s fortunes, the spate of oil, gas and commodity discoveries is fuelling economic growth
and spawning a bling-fuelled consumption culture in countries such as Nigeria, Angola, Ghana, Mozambique
and Kenya.
"Africa is a continent to watch … it’s becoming more attractive to investors thanks to strong growing
consumer markets," Fflur Roberts, head of luxury goods research at Euromonitor, said. "South Africa is already
an important market for luxury goods with its large population of high-income earners. When we talk of sub-
Saharan countries, we generally don’t include South Africa because compared to the other emerging markets
it’s too advanced.
"However, there is still a lot of room … many of the luxury brands don’t operate there [South Africa] and if
they do, on a very small level. It’s definitely an area where luxury brands will be
looking to move into," Ms Roberts said.
With 60%, or 71,000, of Africa’s millionaires based in South
Africa, it has the continent’s most developed luxury retail
sector, with representation by global luxury brands such as
Cartier, Louis Vuitton, Burberry, Fendi, Gucci and Salvatore
Ferragamo.
Amelia Beattie, chief investment officer for Stanlib Direct Property Investments, which acts as an asset
manager for Liberty Group’s 75% ownership investment in the centre, said the move was fuelled by a demand
from shoppers and tenants for stronger representation by high-end retailers. Brands such as Jimmy Choo and
Alexander McQueen are expected to set up shop in the Diamond Walk, planned to open in mid-2015. Africa’s
most populous nation, Nigeria, is also a key market for upmarket trappings.
Luxury retailers such as Ermenegildo Zegna, Porsche and Hugo Boss have already ventured into Nigeria, with
Prada a probable new arrival, Ms Roberts said. Following the success of Zegna’s Lagos store, it had confirmed
three more openings in the region by next year. Despite numerous problems to overcome in the region, other
brands were certain to follow suit in opening new outlets, she said.
Source: Business Day Live
60% of millionaires in
South Africa
5. 28th
to 5th
of May 2014
5
What Luxury Home Buyers Want
The two amenities luxury home shoppers want the most are a chef’s kitchen and a sprawling views,
particularly of oceans, mountains, or cityscapes, according to a new survey by realtor.com.
Fifty-four percent of luxury home buyers voted for the chef’s kitchen, while 44 percent flagged the views.
Thirty-eight percent also say the square footage of the property is a key attribute, and 36 percent say having
an expansive master suite is important.
“The luxury home buyer is an important contingent of today’s real estate market, as luxury homes tend to
drive trends throughout the entire balance of the marketplace,” says Barbara O’Connor, chief marketing
officer at Move Inc., which operates realtor.com.
“We are seeing large portions of buyers throughout the country — from 23 percent in the Northeast region
and 23 percent in the South Atlantic — eyeing luxury homes. This means sellers, builders, and certainly
REALTORS® should all be paying particular attention to desired luxury amenities, such as chef-quality kitchens
and master suite features, to close deals for them.”
Forty percent of luxury buyers say the biggest challenge in searching for a high-
end luxury home is to find a property that meets their family’s needs; 20 percent
say it’s limited number of properties offered.
What’s prompted their search for a luxury home? The realtor.com survey
found that 19 percent of luxury home shoppers say a recent success in their
career has prompted their home search, while 17 percent say they entered the
market because they’re newly retired.
Other popular motivations for a luxury home: 14 percent say they are entering the luxury market as an
investment, and 12 percent say they have entered the market to purchase their first home.
Source: Realty Biz News
54%wantachefkitchen
44%wanttheview
Meeting Family
Needs
6. 28th
to 5th
of May 2014
6
Arabian Travel Market has
focused on Luxury
There are plenty of facts and figures that highlight why the
luxury hotel industry in the Middle East is a lucrative business
to be in. One of the core markets, GCC nationals, spend 260%
more on airfares than any other nationality, 430% more on
accommodation and 558% more on dining.
Unsurprising, when according to a 2012 Credit Suisse
report, the number of millionaires in the UAE is set
to grow by 12% by 2017, reaching 48,000
individuals. The global picture is promising too:
research released by the Boston Consulting Group
(BCG) put luxury goods and services spending by
the world’s super rich at US $1.8 trillion in 2013,
with $1 trillion spent on services and $460 billion
allocated to one-of-a-kind travel adventures.
But, those with more money typically expect more for their
money and they are used to the finer things in life; to access
and impress this lucrative market you have to be well versed in
what luxury means and how to provide it.
The luxury debate — started by our columnist Guy Wilkinson
on page 35 — is likely to be one of the key talking point’s at
this year’s Arabian Travel Market, which features the theme
‘Spotlight on Luxury’, in which premium travel and hospitality
will be the focus.
Luxury brand exhibitors, targeting luxury buyers and visitors,
will be treated to special seminar sessions exploring the high
value market segment for both inbound and outbound
travellers. Mark Walsh, portfolio director, Reed Travel
Exhibitions, organiser of ATM, said there can be “few places on
earth” that have such a concentration of luxury five-star hotels
complemented by a lifestyle to match. “The luxury theme
clearly resonates with ATM participants and so we have a
dedicated platform for discussion and brand showcasing this
year,” he added.
The Oberoi, Dubai, is the official luxury hotel for luxury buyers
at ATM 2014, but a host of other renowned luxury hospitality
brands including Amenyara and Zaya Retreats, Anantara
Resorts & Spas, Mandarin Oriental, Kerzner International, FRHI
Hotels & Resorts, Taj Hotels Resorts & Palaces, Bulgari Hotels
& Resorts and The Ritz-Carlton Hotel Company will be present.
High-flying destinations including Monaco, Mauritius,
Maldives, and the Seychelles will also have a presence.
Source: Hotelier Middle East
Number of
millionaires to reach
48000
7. 28th
to 5th
of May 2014
7
Indian luxury pen market to double in size in 4
years
The Indian luxury pen market is all set to double its size from the current Rs 400 crore in the next four years.
Higher disposable income and greater brand consciousness among Indian, especially young adults, has
increased demand for global brands and almost all of whom are present in the country.
"Despite the sluggish market where discretionary spending has been curtailed, the luxury pen segment has
been growing in double digits," says Nikhil Ranjan, CEO, William Penn - a distributor/retailer of luxury writing
instruments with 26 outlets across the country and a market share of about 30 per cent. The other major
players with a national presence in the market are Mont Blanc, Cross and Luxor. On Tuesday, William Penn
signed an exclusive distributorship agreement with German luxury pen maker Lamy. Lamy is one of the top 5
luxury pen brands in the world.
Indians' penchant for luxury pens pales in significance compared to Chinese. The size of little kingdom's luxury
pen market is at least five times that of India's, estimates Ranjan. This puts its value at Rs 2,000 crore. "It is an
indication of the potential that exists in India," he adds.
Despite the upside, there has not been much of an activity in the luxury pen market in the country which is
broadly divided into the sub-Rs 8,000 category and the Collectors pens which cost in excess of Rs 10,000
(almost 85 per cent of the pens sold fall under the first category and balance 15 per cent under the Collector's
pen category).
This adds to the cost of inventory and working capital management is a critical aspect of this business. While
the distributors have to necessarily buy and stock the pens, the retails have the `sale or return' option.
Source: Business Today
8. 28th
to 5th
of May 2014
8
LVMH Buys Controlling Stake in Singaporean
Restaurant Chain
As dining out by Asian families and young professionals grows in popularity, private equity investors have
shown an appetite too. The latest investment speaks to a love for pan-friend pork buns,
turnip pastries and other tasty Cantonese treats.
Luxury giant LVMH Moet Hennessy Louis Vuitton SAMC.FR -0.89% is
spending more than $100 million for a larger than 90% stake in Chinese
restaurant chain Crystal Jade, according to Christina Teo, managing
director at LVMH’s private equity arm.
The private equity arm, L Capital Asia, had been looking at Crystal Jade for three
years, Ms. Teo said in an interview Wednesday. The sale was in part because Crystal
Jade Chairman and CEO Ip Yiu Tung, at 65 years old, is looking to step back in his role with the firm. Mr. Tung’s
majority stake will be reduced to a minority stake, although he will remain as CEO for about one year after the
ownership handover.
Crystal Jade, founded in 1991, specializes in
Cantonese cuisine, including dim sum,
handmade noodles and baked goods. The firm
is based in Singapore and has over one
hundred outlets across Asia, including in China,
Hong Kong and a number of Southeast Asian
countries.
LVMH plans to help the chain enter new
countries, as well as expand deeper into China,
where the chain’s current presence is mostly
limited to first tier cities. LVMH has the
international infrastructure and experience to
help the restaurant chain get better rental
locations globally, increase its wine offerings,
improve branding and expand its footprint not just in China, said Ms. Teo.
She added that the restaurant’s China operations haven’t been hurt by the country’s push for officials to cut
back on lavishing spending including fine dining, because Crystal Jade offers cuisine at a wide range of price
points. Investors considering luxury brands and high-end restaurants have been wary that such businesses are
more susceptible to the austerity drive starting under President Xi Jinping in 2012.
According to Ms. Teo, Crystal Jade’s revenue has been growing at 20% each year since its founding.
L Capital is investing from its second Asia fund, which raised $1 billion this year. The fund has also invested in
Australian apparel maker 2XU and Italian luxury shoe brand Giuseppe Zanotti. After Crystal Jade, the fund
plans to invest in a Chinese online fashion company, said Ms. Teo.
Source: Forbes India
$100 million for
a 90% stake
10. 28th
to 5th
of May 2014
10
Top Luxury Companies by market Cap
The table below shows the top 20 luxury companies by Market Cap listed in the stock markets and
their weekly percentage change at the closing stage of this week:
#
Company Name
Market Cap (5thth of May)
(USD billion)
Market Cap (28th of April)
(USD billion)
% Change
1 Lvmh 99.44 100.01 -1%
2 Daimler 98.3147 97.7454 1%
3 Diageo 77.8122 75.7482 3%
4 Nike 64.1 63.84 0%
5 Hermes 37.113 37.122 1%
6 Christian Dior 37.0435 36.7218 0%
7 Porshe automobile 33.44 33.6 0%
8 Pernod Ricard 31.831 31.2294 2%
9 Estee Lauder 29.34 28.01 5%
10 Kering 27.8139 27.6966 0%
11 Luxxotica 27.1745 26.7996 1%
12 Tesla motors 26.16 24.79 6%
13 Prada 20.8897 20.1747 4%
14 Harley Davidson 15.99 15.76 1%
15 Ralph lauren 14 13.83 1%
16 Beam 13.8 13.83 0%
17 Lindt & Spruengli 12.5517 13.8 1%
18 Coach 12.18 13.3896 -12%
19 Royal Caribbean 11.815 12.489 2%
20 Nordstrom 11.76 11.66 1%
The below graph shows the top 5 companies
that had the highest increase in market cap
(last week):
The below graph shows the 5 companies that
had the highest decrease in market cap (last
week):
25%
17%
11%
9%
8%
11. 28th
to 5th
of May 2014
11
The table hereunder shows the top 15 luxury companies by P/E ratio and their weekly percentage
change last week:
# Company Name P/E Ratio (5th of May) P/E Ratio (28th of April) % Change
1 Yoox spa 116.86 115.18 1%
2 Group FNAC 38.72 39.99 -2%
3 Blue Nile 37.29 39.6 -7%
4 Luxxotica 35.88 35.33 2%
5 Hermes 33.33 33.21 0%
6 Beam 33.22 33.21 0%
7 Harman International 29.55 31.98 -8%
8 Estee Lauder 28.43 28.12 1%
9 PVH corp 27.8 26.89 5%
10 Shiseido 27.65 26.78 3%
11 Remy cointreau SA 27.43 26.5 2%
12 Treasure wine estates ltd 26.8 26.09 3%
13 Tempur sealy international inc 26.34 25.63 7%
14 Salvatore ferragamo 25.56 24.7 0%
15 Polaris Industries 24.71 24.48 2%
T A K E A B R E A K
12. 28th
to 5th
of May 2014
12
Turnberry, the iconic Scottish golf course which hosted one of the sport's greatest duels, has been sold to American billionaire
Donald Trump. The real estate magnate announced on Tuesday that he had bought the famous links course for an undisclosed sum
from the Dubai-based Leisurecorp."It was an opportunity, as far as I was concerned,” Trump told golf.com.
"Turnberry is considered one of the greatest courses in the world. It’s a special place. It’s an important place.”Trump said he had no
plans to change the course layout, which sits on a former World War One airfield and overlooks the Irish Sea, but he does want to
develop the Turnberry hotel.
Trump owns a handful of golf courses in the United States but has never had one that has hosted a major championship but that
could change with his purchase of Turnberry.The course has hosted the British Open four times, most recently in 2009, and is likely
to be considered for future majors."Turnberry is a great favorite among the players and it's on the Open rota for sure," R&A chief
executive Peter Dawson told the BBC.
The British Open was first staged at Turnberry in 1977 when Tom Watson beat fellow American Jack Nicklaus by a stroke in a
famous final round which became known as the "duel in the sun."
Trump buys Turnberry golf course
Source: Reuters
15. 28th
to 5th
of May 2014
15
Top 12 Luxury Companies Charts
The charts below reflect the index movement of the top 12 companies that had the highest market cap
during this week:
Price Change
Begin High Low End Value %
176 203.23 154.95 195.88 19.88 11%
* One year data *Market: US * Currency: US Dollar
Price Change
Begin High Low End Value %
43.147 71.27 42.4 66.03 22.883 53%
* One year data *Market: France * Currency: Euro
Price Change
Begin High Low End Value %
23.16 25.4 21.23 23.3 0.14 1%
* One year data *Market: France * Currency: Euro
Price Change
Begin High Low End Value %
63.96 80.26 59.11 72.99 9.03 14%
* One year data *Market: US * Currency: US Dollar
Price Change
Begin High Low End Value %
136 149.26 121.28 146.9 10.9 8%
* One year data *Market: France * Currency: Euro
Price Change
Begin High Low End Value %
93.882 95.92 78.78 86.19 -7.692 -8%
* One year data *Market: Germany * Currency: Euro
16. 28th
to 5th
of May 2014
16
Price Change
Begin High Low End Value %
170.8 185.15 136.95 158 -12.8 -7%
* One year *Market: France * Currency: Euro
Price Change
Begin High Low End Value %
70 76.24 63.63 75.62 5.62 8%
* One year *Market: NYSE * Currency: US Dollar
Price Change
Begin High Low End Value %
7.8 11.24 7.25 10.92 3.12 40%
* One year *Market: US * Currency: US
Price Change
Begin High Low End Value %
39.71 42.97 35.22 40.92 1.21 3%
* One year data *Market: Italy * Currency: Euro
Price Change
Begin High Low End Value %
59.5 265 55.12 210.91 151.41 254%
* One year *Market: US * Currency: US Dollars
Price Change
Begin High Low End Value %
262.1 283.2 223.95 251.5 -10.6 -4%
* One year *Market: France * Currency: Euro