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BMW - Top Luxury Brand for China’s Nouveau Riches
According to the Global Luxury Report, BMW was voted the top luxury brand by 600 China’s richest individuals. Second came Louis Vuitton, followed by Mercedes-Benz and Rolex. The research carried out by the Global Luxury Report, China’s leading luxury business magazine, questioned 604 Mainland Chinese entrepreneurs with wealth of at least 10 million RMB on their lifestyle and spending habits.
Whilst BMW was the clear overall winner, the survey highlighted the growing sophistication levels of China’s high net worth individuals with the likes of Giorgio Armani and Cartier also making the top ten. For Chinese women, Louis Vuitton was voted top luxury brand.
Between May and November 2006, the Global Luxury Report surveyed 604 Mainland Chinese high net worth individuals (defined as with assets of over US$1 million), of which 191 have assets of over US$10 million.
For the third year running, surveys were carried out on a one on one basis, making this the largest and most authorative survey of its kind in China.
85% of respondents were male.
The average age of respondents was 40 years.
24% have no university education.
Results compiled by World Luxury Association, leading market researchers for China. |
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Puma Becomes Luxury Brand
French luxury goods group PPR, owner of Gucci and Yves Saint Laurent, has agreed to buy a 27.1-percent stake in German sportswear manufacturer Puma and launch a full takeover offer for the group, the two companies said on Tuesday.
A takeover by PPR would complete the transformation of the former family-run German company, which has become one of the world’s leading sports brands and principal rival to fellow German group Adidas and US-based Nike.
Puma has often been the subject of bid speculation, especially in the wake of rival Adidas’s $3.8 billion acquisition of Reebok last year. The bid from PPR values the German company at about �5.7 billion ($7.6 billion). PPR, controlled by French tycoon Francois-Henri Pinault, said the planned acquisition was justified by Puma’s “attractive growth potential,” adding that the German group could become an “iconic brand.” In its own statement, Puma welcomed the offer, which it said gave it the support of “a financially strong and leading international company”.
Puma said it would also “benefit from PPR’s global positioning, strong portfolio of premium brands and expertise in the retail business.” The Puma management board “is convinced that PPR, as one of the world’s top fashion and retail companies, will be the perfect partner for us,” it said.
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Luxury Image Increases Burberry Sales
Pushing its luxury brand image and a “more centralised creative direction” made Burberry’s 150th year of trading a success, with strong performances across all divisions pushing underlying annual profit up 12%. Total underlying revenue increased 15% to ￡850.3 million, with retail revenue increasing 24%.
In a statement, Burberry attributed the performance to a synchronised marketing programme and enhanced consistency of brand presentation. Outerwear, traditionally strong for Burberry, gave an “outstanding” performance driven by product innovation and good customer response to luxury handbag initiatives.
Commenting on the results Angela Ahrendts, chief executive, stated: “We advanced the luxury component of the brand, accelerated retail expansion and continued to evolve the operating model. We face the current year with confidence, given the strength of our brand, effectiveness of our strategies and talent of our teams around the world.”
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Daimler Feels Luxury Brand Can Stand On Its Own
There are no acquisition targets I can recognise that could strengthen Mercedes,'’ CEO Dieter Zetsche told German Sunday newspaper Welt am Sonntag. The Daimler chief, who just days ago sealed a deal to sell its loss-making US unit Chrysler to private equity firm Cerberus Capital Management, sees little to gain from trying to diversify risks by balancing its brand portfolio with another leading marque.
“We are at the top of the industry with the Mercedes car brand. Any integration of another brand would tend to drag us down. There is nothing to win from it either for the (Mercedes) brand or for the profitability.'’ “The Daimler AG will offer exciting vehicles in the premium segment, remains highly profitable, is the most attractive employer, and greatly pleases its customers and shareholders with top products and services,'’ he said.
According to Reuters, since BMW sold its British unit Rover in 2000 for a pittance, Daimler’s arch-rival has propagated a philosophy that close mergers and alliances only weaken a brand’s profile. |
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Russian Billionaire to Revive Faberge Jewelry Brand
Viktor Vekselberg, Russian billionaire and co-owner of UC Rusal aluminium giant and TNK-BP oil venture, has teamed up with the founder of BHP Billiton Brian Gilbertson to produce jewelry under the famous Faberge trademark. Gilbertson, who used to be the president of SUAL, Vekselberg’s aluminium company, runs Pallinghurst Resources, an investment fund, whose key asset is the Faberge trademark. It was reported that Vekselberg intends to become a core shareholders in the fund.
The two partners have launched an ambitious project to make Faberge jewelry with the participation of Russia’s largest diamond producer Alrosa. According to the paper’s source, Pallinghurst Resources intends to use the Faberge brand, among other things, to promote Russian diamond sales. Alrosa declined to comment.
In February 2004, Vekselberg purchased the late Malcolm Forbes’ Faberge collection, including nine Easter Eggs created in the late 19th and early 20th centuries on commission from Russia’s Imperial House, and about 180 other Faberge pieces. The transaction, arranged through Sotheby’s, is said to have been in excess of $90 million.
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Kenzo to Debut in Indian Luxury Market
Genesis Colors, popular for its high-end fashion label Satya Paul, is in advanced negotiations with LVMH Group for bringing luxury apparel and perfume brand Kenzo to India.“Discussions for Kenzo are on with prospective parties. Currently, we will not be able to divulge any details,” a spokesperson for LVMH in Singapore said.
The fashion label would be making its foray into India under a franchising arrangement. The spokesperson added that bringing Kenzo to India “would be a project that will see a lot of investment”. Indian market for luxury goods is estimated to touch $452 million in coming years making it the land of promise for global brands, says a survey on luxury goods and Indian consumers. Earlier, LVMH India director Ravi Thakran said Kenzo and Thomas Pink were the two LVMH brands that were committed to entering India shortly. He said LVMH was looking at expanding India’s luxury retail environment, which is currently restricted to only five-star hotels.
“We are very serious about enlarging this environment to luxury malls. DFS is our international retail concept under which we take entire malls and have done so in Hong Kong and Singapore. The sizes of these malls range from 1-2.5 lakh square feet and have 30-50 boutiques and separate floors for perfume, jewellery and watches,” Thakran said.
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Dubai’s Jumeirah Plans 57 Luxury Hotels Worldwide
Jumeirah expects to be operating 57 hotels around the globe by the end of 2011, with the emphasis on iconic properties, the Dubai-based company’s executive chairman Gerald Lawless said.
Jumeirah, which operates the Burj Al Arab hotel, has identified 26 locations for hotels including properties in major cities such as Paris, London, Frankfurt and New York, Lawless told the Reuters Middle East Investment Summit in Dubai.
The firm is close to signing a deal in Beijing and is “very close to linking up with an investor in Bali and Jakarta”, Lawless said, adding China could be put on hold until after the 2008 Olympics if construction is not started soon.
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Prices Soaring in Hong Kong Luxury Home Market
Luxury homes in Hong Kong are getting more expensive, with the sale of a penthouse earlier this week setting a record apartment price of HK$344,320 ($44,000) per square metre. This broke the previous high of HK$294,900 ($37,700) per square metre set in 1997, right before the Asian financial crisis. The highest-ever selling price for a home in Hong Kong was set earlier this month when one house in the high-end Peak district fetched HK$414,260 ($53,000) per square metre.Last year another house on the Peak sold at over HK$376,600 (about $48,000) for a square metre.
Analysts from The World Luxury Association say rich mainlanders as well as people who have made huge profits in the financial markets are fuelling the demand for a limited supply of top-end luxury homes here.
“Penthouses in Hong Kong can cost a premium of as high as 40 per cent to 50 per cent, because there are fewer of them,” WLA researcher Patrick Ho said.“In recent years homes with full views of Victoria Harbour and with posh clubhouses have also commanded above-average prices.”
More records look set to be broken with one of Hong Kong’s leading developers, Sun Hung Kai Properties, forking out HK$1.8 billion (about $230 million) - a record HK$454,000 a square metre - for a plot of Peak land last December.
This means prices of new homes there will have to be set above this mark, possibly as high as HK$645,600 a square metre, analysts say.
Sun Hung Kai is also co-developer of the luxury Orchard Turn condominium in Singapore, which this week set the city-state’s record home price of S$43,000 (Bt1.5 million) a square metre.
But The WLA has noted that such extreme prices extend only to a limited supply of homes that are located in exclusive locations and that come complete with luxurious frills. For Hong Kong this translates into an address on the Peak, country-club-like facilities and top-end designer furnishings. The latest record price of HK$344,320 a square metre was set by an apartment at The Legend at Jardine’s Lookout, which was first released in 2005.
The 346-square-metre penthouse with a private swimming pool cost a hefty HK$123.2 million. It is part of a 376-unit condominium project located near the shopping district of Causeway Bay. Incidentally, Causeway Bay also commands retail rents that are among the world’s costliest, if not the highest.
Hong Kong’s luxury-home secto - units exceeding 100 square metres - are expected to rise by 10 per cent to 15 per cent on average this year. On the other hand, mass-market apartments are forecast to appreciate more slowly in the single-digit range. Slightly more than half of Hong Kong residents live in private properties.
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Kempinski to Manage New Luxury Train in China
The full Tangula luxury train experience will be unveiled in China, the United States and Europe in May 2007, after which bookings will be taken. Inaugural journeys will depart from Lhasa, Lijiang and Beijing in Spring 2008.
The purpose-built Tangula trains will take guests on two distinctive routes through China, crossing wild grasslands, desert plains and vast plateaus. Departing from Beijing, the five-day/four night journey to Lhasa ventures across the mystical Tibetan plateau. The Beijing to Lijiang route also takes five-days/four nights and explores the inspiring landscapes of Guangxi and Yunnan provinces. Tangula trains leaving both Lhasa and Lijiang for Beijing will follow a four-day/three night itinerary. On all routes, daily off-train excursions will enable guests to further immerse themselves in local cultures and traditions.
Each Tangula luxury train will accommodate up to 96 passengers in 48 spacious suites. The suites will feature an en-suite bathroom with shower, mini bar and in-room entertainment system with music, TV and satellite internet. A butler is on call throughout the journey, while a doctor is available during the ascent to Lhasa. ”Tangula trains will provide passengers with unique and unforgettable luxury travel experiences,” said Josh Brookhart, Tangula International’s Co-Founder and CEO, during the signing ceremony in Geneva in February. “The journeys will enable discerning travellers to immerse themselves in the stimulating landscapes and cultural traditions of China that were previously inaccessible to them.”Tangula is a very exciting project that matches Kempinski’s pioneering spirit perfectly,” said Reto Wittwer, President and CEO of Kempinski. “We are delighted to manage the Tangula luxury trains. We can introduce our guests to a very new and exclusive travel experience in China, courtesy of Kempinski.”
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Swatch Group Profit Rises 35 Percent on Luxury Watches
Swatch Group AG, the world’s biggest watchmaker, reported annual profit increased 35 percent as bankers spent bonuses on its most expensive timepieces, including the Breguet and Omega brands, Zee News reports. Net income after minorities climbed to 827 million francs ($687 million) from 614 million francs in 2005, the Biel, Switzerland-based Company said in an e-mail today. The company plans a 400 million-franc share buyback.
Swatch Group had an “excellent start'’ to 2007 and expects another “very promising'’ year with an increase in profitability and further sales growth, the company said in the statement. Sales in 2006 gained 12 percent to 5.05 billion francs, Swatch Group said in January. Demand was helped by rising spending power in India and China. Geneva-based Cie. Financiere Richemont AG, which makes Cartier and Mont Blanc watches, in January reported a 10 percent increase in fiscal third-quarter sales, as sales in Asia excluding Japan gained 13 percent.
Swiss watch exports to Hong Kong, the industry’s second-largest market and a point of sale for Chinese consumers, jumped 21 percent to 155 million francs in January, according to the Federation of the Swiss Watch Industry. Registered shares of Swatch Group have gained 13 percent this year, eclipsing the 5 percent slide by shares of Richemont and 1 percent gain by the Merrill Lynch Luxury and Lifestyle Index.
Swatch Group’s profit beat the median estimate from 11 estimates surveyed by Bloomberg of 785 million francs.
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