For Luxury Groups, a Shifting Landscape

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Elizabeth Paton and Vanessa Friedman, For Luxury Groups, a Shifting Landscape; Strategic moves at Kering, LVMH and Richemont in recent months. New York Times, June 30, 2018.
https://www.nytimes.com/2018/06/ ... y-kering-gucci.html

Excerpt in the window of print: Strong demand from China has bolstered bottom lines.

Quote:

"earlier this month [June] * * * Kering * * * confirmed a wider strategy already underway to narrow its focus to five of its premium houses [its 'Big Five']: Gucci [Guccio Gucci (1881–1953) founded in Florence, Italy in 1921, which was sold by a grandson in 1988], Saint Laurent [Yves Saint Laurent (1936-2008) founded in 1961, and sold in 1993], Balenciaga, [Cristóbal Balenciaga (1895 – 1972) founded in San Sebastián, Basque Country, Spain, in 1919; moved to Pari in 1837; closed his fashion house in 1968 (because he did not believe a brand should outlast the founder); brand right was sold in 1986], Alexander McQueen and Bottega Veneta.

"LVMH Moët Hennessy Louis Vuitton and Richemont [are] the world's three biggest luxury groups * * * Thomas Chauvet, head of European luxury goods equity research for Citibank [said of these 3 groups: ']they have reinvented themselves as a pure luxury player [or have moved in that direction].'

About Kering: "First, in January, came the long-anticipated spinoff of the German sports brand Puma [considered low end], a clear step toward a long-term commitment to luxury that was welcomed by shareholders."

"Recently Richemont, the Swiss luxury group that now owns 17 upscale brands such as Cartier [Louis-François Cartier founded the jeweler in Paris in 1847; his descendants sold in 1964], Van Cleef & Arpels and Montblanc, has disposed of smaller, underperforming labels like Shanghai Tang [上海灘; Hong Kong businessman David Tang 鄧永鏘 (1954 – 2017) founded in that city in 1994, sold in 1998] and Lancel and made a series of key strategic purchases to ramp up its digital retail network. Earlier this month it announced the completion of its takeover of the luxury e-commerce site Yoox Net-a-Porter after an offer of €2.8 billion, along with a deal to buy Watchfinder, a pre-owned premium watch specialist that sells online and through boutiques.

"And LVMH — by far the most dominant of the conglomerates with around 60 brands encompassing not only fashion, jewelry, and cosmetics but also wines and spirits and a market capitalization of €140.4 billion, more than twice the size of either Kering and Richemont — completed the equivalent of a cabinet reshuffle of the men's wear lines in its major fashion houses, moving Kim Jones from Vuitton to Dior Men, hiring the streetwear star Virgil Abloh as artistic director of Louis Vuitton men's wear, and shifting Kris Van Assche from Dior Homme to Berluti.

"Mr Chauvet of Citibank said: 'Gucci will account for over 70 percent of group operating profit in 2018 [ie, the risk of all eggs in one basket]

Note:
(a)
(i) The online title is "Luxury’s Chess Masters Prepare for a New Game."
(ii) There is no need to read the rest.

(b) Michele Taddei and Renzo Zengiaro (both male) in 1966 founded Bottega Veneta ('Venetian Shop' in Italian), in City of Vicenza (60 kilometres (37 mi) west of Venice), Italy.
(i) Michele
https://en.wikipedia.org/wiki/Michele
(ii) Renzo
https://en.wikipedia.org/wiki/Renzo (section 1 Origin and Meaning)
(iii) Italian-English dictionary:
* bottega (noun feminine): "shop"
https://en.wiktionary.org/wiki/bottega

* The Italian word veneto is
(A) either a proper noun masculine for an inhabitant of the Veneto region in Italy (whose capital is Venice -- Italian: Venezia; there appears to be no English noun for an inhabitant of veneto)
(B) or an adjective masculine meaning "of Veneto" region.
https://en.wiktionary.org/wiki/veneto

Veneta is the feminine form for both (proper noun) and adjective).

(c) Yoox Net-a-Porter
https://en.wikipedia.org/wiki/YOOX_Net-a-Porter_Group
("In 2010, Massenet sold a majority stake in Net-a-Porter to Swiss luxury goods holding company Richemont for an estimated £50m")

The quotation is probably wrong, because YNAP.com (the website of Yoox Net-a-Porter) today has in its website that says, "Richemont International acquires 93% of the Net-a-Porter Group for £350m" which New York Times reported on Mar 31, 2015 as "or about $519m."
(i) Italian Federico Marchetti (1969- ). founded e-commerce site Yoox.com in Italy, and acquired Net-a-Porter in 2015 -- "becoming the largest e-commerce fashion company in the world"  en.wikipedia.org for Federico Marchetti).
(ii) Natalie Massenet (née Rooney; born in 1965 in Los Angeles to American father and English mother; met in London Arnaud Massenet, a French hedge fund manager based in London, and moved from LA to London; they got married and lived there; she founded e-commerce site Net-a-Porter.com in 2000; sold it in 2010; divorced; still live in London)
(iii)
(A) Imran Amed, The Secret Deal to Merge Net-a-Porter with Yoox; The untold story of how Compagnie Financière Richemont agreed to merge Net-a-Porter with Yoox behind the back of Natalie Massenet for a valuation much lower than what many believed the business to be worth. London: The Business of Fashion, Jan 19, 2016
https://www.businessoffashion.co ... -merger-secret-deal
("In the end, Andrew Robinson, the partner at Deloitte LLP who was appointed [as the arbitrator] to settle the dispute [over valuation of Net-a-Porter in the merger between Net-a-Porter founder, management and early investors who were by then minority stakeholders on one side and Richemont on the other], concluded in early August that the headline value of the Net-a-Porter Group business was about half way between the two parties, or £1.45 billion — not quite the value Net-a-Porter management were looking for, but at more than £500 million higher than the price announced in March, a victory nonetheless for the Net-a-Porter minority shareholders. Massenet took home more than £100 million as a result" of the merger)
(B) Richemont Offers €2.7 Billion for Full Control of Yoox Net-a-Porter; The bid still needs to be approved by YNAP shareholders, but chief executive Federico Marchetti has indicated he would support the deal. The Business of Fashion, Jan 22, 2018
https://www.businessoffashion.co ... -net-a-porter-group
(reporting from Geneva: "Nearly three years after Richemont SA merged Net-a-Porter with Italian rival Yoox SpA, the Swiss luxury conglomerate is doubling down on its commitment to the fashion e-commerce leader. Richemont, already the Yoox Net-a-Porter Group’s largest shareholder, has made a public tender offer to buy the shares in YNAP that it doesn't already own, equivalent to about 50 percent of the company, for €38 per share, an almost 26 percent premium over YNAP's closing price on the Milan Bourse on Friday of €30.26 per share. The total scale of the investment for Richemont would be about €2.7 billion, valuing the overall YNAP business at about €5 billion")

(d) South African "Johann Rupert founded Compagnie Financière Richemont SA in 1988 [in Geneva, Switzerland] when he spun off the international assets of Rembrandt Group Ltd (now Remgro Limited), a South Africa-based company founded in the 1940s by his father, Anton Rupert." en.wikipedia.org for Richemont.
(ii) The English surname Richmond (Richemont was -- and still is -- a French cognate) is "of French origin," brought to England from Norman Conquest, were -- and still are -- place name Richemont in North France, and composed of "the Old French elements riche, rich or splendid, plus mont, hill." www.surnamedb.com (where db signifies "database").