Savigny Luxury Index June 2011 | Source: Savigny Partners

LONDON, United Kingdom — The M&A and IPO scene in luxury goods and fashion continues to storm ahead. This month’s Market Pulse reveals a redefined Savigny Luxury Index which now includes Italian fashion powerhouses Prada, and soon, Salvatore Ferragamo.

Big news

• Two very high-profile IPOs: Prada listed in Hong Kong on 24 June and Salvatore Ferragamo listed in Milan on 29 June.  Both pulled off their IPOs amongst tricky conditions with high levels of IPO pullouts since the beginning of the year both in Asia and in Europe

• Stripping out Prada, which caused an artificial jump in the SLI, the SLI decreased by 2 percent; still outperforming the MSCI which decreased by 3.2 percent.  Despite concerns over rising interest rates in China, the luxury sector (along with internet stocks) has been seen as a safe haven for investors as the global economic outlook is marred by a looming debt crisis in the USA and in certain European countries

• Continued strong M&A activity: Kurt Geiger, Moncler and Uriage were all snapped up during the month

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Savigny Luxury Index May 2011 | Source: Savigny Partners

LONDON, United Kingdom — As luxury stock valuations continue to roar ahead, even as the overall market has stalled, and luxury brands go to private and public investors to finance further expansion, we take our monthly check of the Market Pulse to understand the key drivers.

Big news

• The Savigny Luxury Index continues its upward trend led by the bullish outlook for the sector in terms of both organic growth and acquisitions

• Continued good news flow with Hermès announcing outstanding Q1 results despite its exposure to Japan, which remains its largest market (representing almost a fifth of its revenues).  Burberry also posted stellar full year (end March 2011) results but signaled further investment in order to capitalise on the brand’s momentum

• There has been a flurry of M&A activity during the last month despite high valuations.  Puig acquired the fashion house Jean-Paul Gaultier from Hermès.  Labelux went on a shopping spree bagging Jimmy Choo from TowerBrook and Belstaff from the Malenotti family.  Department store group Coin was acquired by BC Partners.  French leather goods brand Le Tanneur was acquired by Qatar Luxury Group, owned by the Emir of Qatar’s spouse.  Chinese conglomerate Fosun bought a minority stake in the Greek jewellery brand Folli-Follie

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Brooks Brothers: Made in America | Source: Brooks Brothers

Made in America: A hook for wealthy shoppers (Ottawa Citizen)
“The Made-in-America label has undergone a deluxe makeover. Everyone from Brooks Brothers to the Olsen twins is using it to hawk luxury goods… ‘There is a customer that appreciates that the product is made in the United States and is willing to pay for the difference.’”

My-wardrobe boosts foreign dress effort (FT)
“‘The past 12 months and first quarter of 2011 has been a pivotal time for my-wardrobe.com. Not only have we seen phenomenal growth in the UK market, but we have already seen a significant rise in sales across Europe as we lay the foundations for our international expansion.’”

Luxury brands and Social Media (North Jersey)
“Having 4 million Facebook fans or more doesn’t amount to much unless the online interactions also boost the bottom line. ‘Ultimately, this is about social commerce… Social networking is nice, but social commerce is much better, and that’s where we need to get to.’”

LVMH denies attempts to destabilize Hermès (Reuters)
“Puech dismissed efforts by LVMH Chief Executive Bernard Arnault to strike a conciliatory tone regarding the Hermès approach. ‘After six months, we are the target of incessant attacks of the kind we’ve never seen in 174 years, even though LVMH says its approach to us is friendly… With friends like these, who needs enemies?’”

The Mexican fans Ralph Lauren could do without (Guardian)
“Sometimes, the market gets away from the marketers… For the Mexican children who see narcos as role models, the Polo look becomes something to imitate, and knock-off versions are readily available and widely worn. This is the sort of success a label would happily do without.”

Christian Siriano for Send The Trend | Source: Send The Trend

Because, Obviously, Everyone Needs a Stylist (WSJ)
“Now, a crop of new e-commerce sites are trying to cash in on regular consumers’ desires for a Hollywood-type stylist experience of their own. The sites combine the Internet’s powers of customization with the cachet of stylists to attempt to match of-the-moment products to shoppers’ personal preferences.”

Fashion hunts for talent in new growth phase (Reuters)
“The fashion industry is entering a new growth cycle with a bigger focus on customers’ price, quality and style expectations than in the mid-2000s, prompting brands to renew their design teams… ‘It is when business is good that fashion brands can take important decisions and change designers, not when times are difficult.’”

Indian Fashion Portal Gets $16 Million Funding (WSJ)
“Exclusively.in’s business idea is to make Indian designer wear accessible through an online membership-based portal, and conduct daily sales that price these items at off-the-rack discount prices… With this round of funding, the company will expand to the U.K., Canada and even head to the shores of India this summer.”

Hermès’s Anti-Takeover Plan Is Safe (The Cut)
“The French court assigned to rule over ADAM’s case postponed the hearing until after the shareholder meeting, effectively (and passive-aggressively) dismissing their appeal. Colette Neuville, ADAM’s president, said they’re dropping it: ‘There is not much point in pursuing the issue.’”

Reflections on the Spirit: An interview with Riccardo Tisci (Jessica Michault)
“To understand what makes Riccardo Tisci tick there are only two things you need to know. He is deeply religious and his family means everything to him. These are the twin pillars on which the 36 year old designer has built a solid creative foundation.”

Ralph Lauren in the early days | Source: V7 Web

Oprah salutes Ralph Lauren and the American dream (LA Times)
“So few people, in these starkly striated economic times, during which the barriers between classes have become more insurmountable than ever, get to traverse the chasms of culture and economy that have been leapt by Winfrey and Lauren.”

Hermès Ownership Battle Continues (Epoch Times)
“The controversial takeover of Hermès by LVMH Moet Hennessy Louis Vuitton has taken another turn, with minority investors challenging a French court’s decision to protect the company from being bought out.”

Flash Sale Site Competition Could Ultimately Benefit Designers (Thread NY)
“All of this competition could ultimately be a boon for up-and-coming designers with a less of a brand name… There are over 80 private sale sites in the U.S. today, which leaves a lot of e-commerce space to fill. More space means more opportunities for fashion’s rising stars.”

Relaunch of a Classic (WSJ)
“In a world where watches continue to grow in size and become more cunning in the way they display time, and the boundaries between jewelry and timepieces are increasingly blurred, one sector is beating on against the current: relaunched classics.”

Judith Leiber talks handbags and history (LA Times)
“Who would ever think that women would want to carry rhinestone-encrusted handbags shaped like anteaters or bunches of asparagus? Judith Leiber, that’s who… [her] sculptural minaudieres have been carried by first ladies to presidential inaugurations, and by celebrities on red carpets around the world.”