Ultra Luxury Sales Are Soaring: Sharma

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July 09 (Bloomberg) -- Rahul Sharma, Managing Director at Neev Capital, and Luca Giuseppe Solca, Managing Director of Luxury Goods at Exane BNP Paribas, discuss LVMH buying Loro Piana and the luxury market as a whole. They speak on Bloomberg Television's “The Pulse.” (Source: Bloomberg)

Send actually in very good shape.

Almost the best shape in luxury.

These companies all the way down to porsche sales.

Porsche doing the best among makers.

I think the second thing i would point out is a lot of the big brands have stepped away from apair ell.

-- apparel.

There is very few real apparel high-end brands within the lvmh portfolio.

Very few brands like that.

I think there is significant scarcity in value.

The balance sheet has the least that it has had in years.

3.4 times ibda.

What are the opportunities for this brand now that it has access to lvmh channels?

Well, it can certainly expand into retail faster.

You have the global network to piggy back on.

Thousands of retail locations worldwide.

Then it can certainly reduce some of the cost burden.

Bargaining power certainly higher as you belong to a larger group.

I think that the other -- clearly the expansion into other categories.

One thing that lora can do is have better assortment.

It will improve the operating profit margin which today is below what lvmh has.

I guess you can see it the other way around.

We talk about these luxury companies, smaller groups keeping it as it is.

Loro piana makes their cashmir.

They can bring in other bland brands such as louis vuitton.

It is very special to be brought into the other brands in the lvmh.

Luxuries the last few years has been about china.

This feels different in what ultimately will be the target market.

This feels less glitzy than some of the other almosts of the high end luxury sector.

Is this a different end use they are a we're talking about here and how different is it?

Actually not necessarily.

I think the chinese consumer he or she has matured dramatically.

Much faster than in the west.

Seeing a push behind something that is more discreet.

They fit very nicely into that.

It makes its on cashmir.

This is about discreetly dressing very well.

Fal fit very well in china.

I've been inside a raffle lauren store and someone asked for it there thinking it was a store that solede sold high-end stuff.

It is very much about buying lesser known brand brands.

People want something different.

We were used to a bit of bling maybe from the russian buyers, chinese buyers who wanted a nice logo, possibly in gold, something like that.

What are the brands at the moment that will outperform the others?

High quality, maybe hand-made.

I guess that discretion -- branding and legacy is really important.

Things particularly made in italy still works very well for them.

Some of the niche brands are doing very well.

Hermes is doing very well.

Relatively more discreet names.

The only major one among the main brands is prada.

They are almost like zara in luxury.

Constant flow of new product that keeps consumers excited and keeps the product relatively scarce.

You don't see it on another woman's shoulder, that same bag.

We have seen him bringing businesses together.

Is the skill-set at the top of the luxury business changing dramatically in the way that you're getting these big groups with a series of subbrands to them maybe operating in a different way than 10 years ago?

I think certainly lvmh has the chance to build rather independent businesses and this works very well.

Businesses must have a strong entrepreneurial background like in this case.

In other cases within lvmh.

I can understand that this is very attract i for the founders or for the -- of loro piana to be a business like that.

What you may want to do in the future is probably -- in brands in your portfolio a bit more and find specific missions for the various brands.

This is probably one thing that lvmh has done less well, for example than -- now that we -- turning more into a cash cow, we're probably going to turn into a cash now the next five years, you need to turn some of the question marks that you have in your matrix and get them into stores.

This is an orchestration rather than a sink or swim situation where you actually bet on a specific individual to lead the business forward.

I need a one-word answer each.

If you need to be bought by p.p.r. or lvmh, what will you do?

I would probably say lvmh just because at least they are going to keep me on for a while.

It is a fair question.

It is a fair question.

Lvmh?

Probably less of an integrated group.

Caring is -- other assets.

At least i got an answer.

Thanks so much guys.

This text has been automatically generated. It may not be 100% accurate.

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