Clay Carter, Global Investment Specialist is the man behind the Macrovue Vues.“The past 12 months have shown positive returns especially with our Luxury Goods Vue which exceeded target generating a return of 28.92% in the last 12 months*”.The top three performers within the Vue were LVMH (72.06% return), Kering SA (58.30% return) and Burberry (45.67% return).
The Luxury Goods Vue is a concentrated portfolio of ten shares, comprising of companies benefiting from the growth in demand for luxury goods. The share portfolio exceeded target over the past 12 months* generating a return of 28.92%. The ASX 200 returned 19.87% in the same period and the M.S.C.I. AC world index is up 26.25 %. Source: Bloomberg. *Figures are to 6 January 2020. Returns are in Australian Dollars and follow a daily compounding frequency. Returns incorporate asset price changes, dividends, income and currency fluctuations. Other fees, charges, taxes and costs have not been considered.
Company Insights – LVMH to acquire luxury jeweller Tiffany and Co.
LVMH is the world’s largest luxury goods conglomerate and a dominant player in the global luxury goods market. Through its Louis Vuitton segment, it makes and sells high-end leather goods, luggage, and accessories. It produces champagne under the brands Moet & Chandon and Veuve Clicquot. LVMH also offers cognac through the Hennessy label. The company manufactures perfumes, cosmetics, watches and jewellery, as well as haute couture through its Christian Dior, Marc Jacobs and Loewe brands.
Clay Carter, Global Investment Specialist says “For those looking to invest in our Luxury Goods Vue, there is more to come with recent announcement of LVMH acquiring Tiffany & Co. Adding Tiffany will almost double LVMH's presence in jewellery and watches and lift jewellery scale and profitability, while attracting younger shoppers and expanding its online jewellery presence”.
LVMH's cash offer of $135 a share for Tiffany will more than double its jewellery scale, bumping LVMH to the top spot in branded luxury jewellery by market share globally from third, behind Richemont and Tiffany, with a share of more than 18%. The deal raises LVMH's exposure in Asia, the fastest-growing market, by 1.5x to a 25.5% share, while helping Tiffany cut its exposure to the U.S., where the brand is thwarted by a strong dollar and lower tourist spending. The deal, expected to close by mid-2020, opens Tiffany to further upscaling at the high end, benefiting from LVMH's expertise with its Bulgari brand, while adding design and marketing capabilities to Tiffany's entry points, where it's struggling most.
Tiffany should prove an interesting fit to LVMH, which is still underpenetrated in jewellery. LVMH's watches and jewellery unit, the company's newest and smallest division, will have 9% of total sales and could reach about $4.5 billion in value in 2019, behind high-end brands Bulgari, Chaumet and Fred in jewellery, and TAG Heuer, Hublot and Zenith in watches. Christian Dior has also added jewellery and watches potential since its full integration. The mid-teens operating margin in watches and jewellery is rising and is already the third-largest LVMH division, ahead of selective retailing (Sephora and DFS), perfumes and cosmetics.