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A Familiar Chart, A US Stock Exodus And A BIG Idea
I'll let you in on a little secret: No one in this industry has anything creative, let alone origina
Yo H, as a luxury goods aficionado, do you have a take on European luxury brands as a secondary play on “the Chinese consumer”?
If I recall correctly, he thinks LVMH has the best brand portfolio vs Hermes, but he didn’t say he was bullish just that Hermes isn’t looking good long term from a portfolio standpoint. China looks screwed from a demand situation so you might have the right idea but the wrong explanation
It’s LVMH vs Kering, not vs Hermes. Hermes is its own thing. LVMH has the portfolio. They have two of the Big 4 (Louis and Dior). Kering has Gucci, but in my opinion, it’s not even top 5 anymore. Kering has struggled to turn it around. They threw a Hail Mary pass in that regard a few weeks ago. Hold that though.
To the China question, Miu Miu has, I think, a lot of traction in that market. Miu Miu is a Prada company. Personally, I don’t love Prada and Miu Miu isn’t exactly for middle-aged men, so I’m not an authority, but if you’re really interested in that space and specifically who’s actually growing their appeal in the Chinese market, Miu Miu (i.e., Prada) is a good place to start looking. I’d look at Prada’s filings and see if they break out Miu Miu sales, and if they do, what the growth rate is in Hong Kong and China.
It’s also worth noting that Kering just promoted the creative director at Balenciaga to the main house, which means he’s going to be taking over the artistic process at Gucci. That’s a bold move. I mentioned this a few weeks ago, but Balenciaga is the only Kering brand with any real buzz. The problem is that Balenciaga’s buzz isn’t always good buzz, unless you think all publicity’s good publicity. It works, sort of, for Balenciaga, but trying to translate their aesthetic (if you can call it that) into success at Gucci is going to be difficult. All of that to say, that move at least makes Kering interesting again, if only in the sort of way that a Hail Mary pass is interesting in football.
But yeah, as the other commenter mentioned, LVMH is the undisputed publicly-traded champion in this category. The issue there is the same as it is for any other such company in any category — namely, is there any value left or is it fully priced?
Thanks for clarifying and for the added detail
H, I feel like I read all of your commentary, curious where the luxury goods discussion was
Thanks you’re the man. I will wait at least a month to ask you another question about luxury brands. LVMH not exactly cheap but not looking like it caught any sexy narratives yet either. Not sure if Chinese consumption will ever bring sexy back (sorry for the justin timberlake allusion) but the Xi-is-hellbent-on-reviving-demand-through-market-pumping narrative is already out there. I guess time will tell for any high end Chinese wealth effect fairy tales to catch a bid.
I’ll look into their regional sales and breakouts, thanks for the tip.
People are still paying their taxes?
Only if they are withheld from a paycheck.
Street macro analysts are reluctant or prohibited from pointing their fingers at the White House from fear of getting their firms blackisted.
Can you blame them? Afterall, we are talking about for-profit businesses.
Do any of you old geezers remember the scandals when internal communication among analysts at firms which were officially wildly bullish on each and every internet firm? Back then firms did not want to lose out on the happily profitable business of bringing garbage companies to market.
Analyst: “We can’t directly blame the President, but maybe we can just indicate the Jan ’25 downward inflection on this chart with something like “deleterious juxtapositional transition” or “DJT” for short.”
H-Man, liquidity is thin, this could be a big squeeze.