Hermès’ winning style is hard to replicate 9 Feb 2024 The French seller of $10,000 Birkin bags has outshined rivals, shrugging off inflation fears and a slowing China. Elite shoppers who see its high-end leather products as a store of value create resilience. Gucci-like brands, more exposed to fashion moods, look more fragile.
UK $13 bln cardboard saga has durable M&A endgame 9 Feb 2024 Three years after its last approach, $7.4 bln Mondi wants to merge with $5.4 bln DS Smith. Amid slowing consumer demand, there’s more strategic and financial logic in uniting the UK-listed packagers. That doesn’t mean there won’t be a squabble over how they’re scrunched together.
Hyundai’s India IPO will crush Korean discount 9 Feb 2024 A Mumbai listing of its local unit at a $30 bln valuation would secure an earnings multiple many times its parent. Proceeds will fuel blistering growth and enable Hyundai to cut more deals. It rarely makes sense to float subsidiaries but this plan looks more than roadworthy.
The obesity drug craze is entering its next phase 8 Feb 2024 Eli Lilly and Novo Nordisk can’t keep up with demand for their weight loss medications. In this Viewsroom podcast, Breakingviews columnists discuss the hype among celebrities, the different approaches to prescribing them in the US and Europe, and how they can reshape the world.
Toyota hitches a ride with the zeitgeist 7 Feb 2024 The car company’s bet on a slower transition is playing well. Shares hit a record high as third-quarter earnings grew 86% and sales of hybrids rose nearly 50%. Even a slowdown in China didn’t dampen the mood as expectations for the world’s largest auto market are fast fading.
Unilever is test case for ‘edible stranded assets’ 2 Feb 2024 The $123 bln consumer goods group relies on brands that look vulnerable to sugar taxes and changing eating habits. Like oil majors facing lower demand, Unilever and others like Nestlé may have to write down the value of these assets. Unfortunately, the problem defies easy fixes.
Capital Calls: Paramount takeover bid 31 Jan 2024 Concise views on global finance: Media mogul Byron Allen, whose company owns The Weather Channel, is offering to buy the TV and film conglomerate for $30 bln. Even if he doesn’t become the next owner, his presence should help get a sale process moving and plump up the price tag.
Diageo investors seem braced for a beerier future 30 Jan 2024 The $78 bln drinks giant’s sales of spirits fell in the second half of 2023, but Guinness held up. If investors thought Diageo could hit its sales targets, it would be worth more. One takeaway is that they think more of its future revenue could come from less highly valued beer.
Philips sees dim light at end of tortuous tunnel 29 Jan 2024 The $19 bln Dutch medical-kit maker faces a lengthy ban on selling ventilators in the US. Despite the hit, CEO Roy Jakobs is confident he can meet his business goals. Yet a possible fine, as well as litigation arising from faulty machines, will keep weighing on investors’ minds.
LVMH could use a bit more transparency 25 Jan 2024 The $375 bln luxury group had a decent 2023, but shares are flagging after a decade-long surge. Boss Bernard Arnault hasn’t had to fret about being in investors’ good books. One way to cheer them now is to make it possible to see how well key brands like Louis Vuitton are doing.
IBM boom suggests a lack of pattern recognition 25 Jan 2024 AI is thriving, says CEO Arvind Krishna. Investors responded by giving IBM shares their best day in 23 years. Yet the tech firm’s reported numbers are pedestrian. Until the benefits show up in top-line growth, IBM’s promise remains – in AI-speak – a hallucination.
Shein’s China and ESG risk puts IPO on iffy ground 25 Jan 2024 The fast-fashion giant is preparing a New York stock market listing. In this Viewsroom podcast, Breakingviews columnists explain how US investors might be wary of links to Beijing, and how its hard-to-recycle $5 tops and sweaters could be vulnerable to future regulation.
P&G cleans up by getting its hands dirty 23 Jan 2024 The $366 bln consumer goods company raised prices just enough to exact pain onto consumers without sacrificing overall sales. It isn’t feeling the effects of inflation either, which helped gross margins. That enabled P&G to reinvest in brands, creating a sweet spot.
Shein’s waste factor is its ultimate IPO risk 19 Jan 2024 The China-linked retailer’s lean production model helps it keep inventory low. Yet its polyester garments are carbon-intensive and hard to recycle. Regulators’ growing unease about textile pollution, and the cost of addressing the mess, may require giving up clients or margins.
Capital Calls: Richemont revival 18 Jan 2024 Concise views on global finance: Shares in the $72 bln owner of Cartier rallied 9% after its quarterly results beat expectations, but concerns over the luxury sector persist.
CVC’s German perfume float may fail the smell test 15 Jan 2024 The buyout fund wants to list beauty retailer Douglas in Frankfurt, valuing its equity at roughly 7 bln euros. It’s time for CVC to offload an asset it’s held since 2015. But high debt and slower online sales than peers are reasons for investors to turn up their noses.
Burberry’s weakness could entice luxury shopper 12 Jan 2024 After a profit warning, the $6 bln UK fashion group is worth 45% less than it was a year ago. Potential buyers will have noticed. While private equity firms may struggle to make decent returns in a slow market, sector leader LVMH could find the situation more tempting.
HPE’s Juniper deal magnifies power of competition 10 Jan 2024 Buying the networking-gear maker for $14 bln is designed to cash in on AI growth. Despite riding the internet boom, however, Juniper has generated less than half the return of the S&P 500 Index since its IPO 24 years ago. It’s a timely lesson on how robust rivalries erode profit.
China’s challenges come dressed in sportswear 5 Jan 2024 Li Ning, which sells athletic goods and leisure wear, was the worst-performing Hong Kong blue chip in 2023. A real-estate play bombed while cost-conscious shoppers are switching back to cheap local brands and foreign rivals like Nike. The retailer reflects its country’s woes.
Microsoft will finally make its mark in mobile 29 Dec 2023 The software giant has famously tripped itself up in smartphones for years, but boss Satya Nadella is primed to play catchup. His Activision and OpenAI deals pave the way with ‘Candy Crush’, Xbox and ChatGPT. Bruising app wars at Apple and Google may exact a high price, however.