$PANW (+1.15%)
$CDNS (+0.48%)
$SEDG (+0.68%)
$FVRR (+1.22%)
$MCO (+0.9%)
$ADI (-0.29%)
$BKNG (+1.15%)
$CAKE (+0.2%)
$DASH (+1.14%)
$EBAY (+0.06%)
$FIG (-0.26%)
$CVNA (+0.78%)
$AIR (+2.27%)
$NESN (+0.69%)
$LMND (+1.42%)
$WMT (-0.18%)
$KLAR (+1.11%)
$DE (-0.1%)
$PAAS (-0.06%)
$MONC (+0%)
$OXY (+1.46%)
$OPEN (+0.12%)
$NEM (-0.48%)
$BN (+0.93%)
$AI (+0.18%)

While all about $MC (+0.26%) and $RMS (-2.94%) one share is flying under the radar of many investors: Prada $1913 (-1.9%) . Thanks to Miu Miu, the company is growing despite the recessionary environment. In recent years, it has achieved 17 % sales growth per year - the best figure in the industry.

Basics about Prada

The Italian fashion group is listed in Hong Kong - which could also be a reason for its favorable valuation. In addition to Miu Miu and Prada, the company also owns other brands. However, these are not relevant for sales. Prada currently accounts for 67% of sales and Miu Miu for a further 32%.

Most of the items are produced in Italy. A small proportion is produced by "selected producers" - a paraphrase for production in low-wage countries such as China. This is the first potential risk for Prada. Made in Italy is probably the most important figurehead, together with the brand history.

The rise of Miu Miu

The brand is the reason for Prada's strong growth. It originates from Prada itself and has been experiencing a sustained boom for years. While it still accounted for 15% of sales in 2018, it now accounts for 32% - and the trend continues to rise. The larger the share of total sales, the greater the impact of Miu Miu's growth on the Group as a whole.

The combination of Prada and Miu Miu is exciting, as Prada can focus on classic and timeless fashion, while Miu Miu is more in tune with the times. The clear demarcation ensures that each brand can remain true to its target group.

This clear brand identity is important for the long-term relevance of a brand. Gucci and Louis Vuitton have been less loyal to their core customers in recent years and have sacrificed long-term brand identity for short-term growth.

Additional growth through the Versace takeover

Even though the management ruled out becoming a fashion holding company similar to LVMH some time ago, Prada took over the Italian fashion label Versace from Capri Holdings this year. $CPRI (+0.23%) The Versace takeover is to be completed by the end of 2025. Prada paid 1.25 billion euros for the struggling luxury company. The expected Versace turnover for 2025 was 810 million euros. The favorable purchase price is due to the fact that Versace is not profitable and its turnover shrank by around 20% in the previous year.

Versace has become too mainstream in recent years and, like Gucci (part of: $KER (-3.95%) ), has lost its core clientele. Prada now has the task of returning the company to its roots. In the valuation, I therefore assume that Versace will be slimmed down by 20%. More on this in a moment. Versace is a bargain overall - but only if Prada manages to bring Versace back to its roots.

Competition

In order to better assess the current valuation multiple, I have compared Prada with its most important competitors.

It is immediately apparent that the EBIT margin of 24% is significantly lower than that of Hermès or $MONC (+0%) . This justifies a certain valuation discount - but However, with an EV/EBITDA of 10, Prada is worth around two thirds of Hermès. The multiples are also falling further due to the strong growth.

Prada is currently valued similarly to LVMH, but the valuation is falling much faster. There is also a 3.1% dividend yield. The debt is conservative at 1.25 net debt/EBITDA.

Valuation

The Prada brand is growing organically only slightly. Future growth depends heavily on Miu Miu. I have created a multiple valuation model to better estimate the influence of Miu Miu and Versace.

My assumptions:

• Miu Miu's growth is leveling off. Growth is expected to fall to 8% per year by 2029.
• The other brands will grow organically by 2% in line with inflation.
• Profitability will decrease due to Versace, but will recover within the next five years.
• Versace sales decline by 20% due to efficiency measures and artificial scarcity.

I am also of the opinion that the valuation multiple is currently too low. is currently too low. The industry is in crisis and is punishing Prada as well. In addition, the EBIT margin is currently lower. I have therefore created a conservative estimate with a constant multiple and a (for me) realistic model with a multiple increase from 11 to 14.

With multiple increase

Without multiple increase

Even without the increase in the multiple, Prada currently looks attractive. The expected return together with the products make Prada the best luxury stock in my eyes!

Note: The article contains my personal opinion and is not investment advice! The share is in my personal portfolio.

ps: this is my first post. Leave some love or constructive feedback there😘

$MC (+0.26%)

The Arnault family has bought almost € 3.7 billion in the last 3.5 years. $MC (+0.26%) in the last 3.5 years.

The average price per share was € 659.

The current share price is € 455.50

$LVMUY (+0.97%)
$MC (+0.26%)
$RMS (-2.94%)
$MONC (+0%)
$KER (-3.95%)

First of all: I don't want to talk down anyone's investments here. Everyone has their own strategy - that is important and right. Nevertheless, I am sharing my personal assessment of luxury stocks such as LVMH, Christian Dior, Moncler, Prada, etc.

In the years 2020 to 2023 - during and after the pandemic - the luxury sector experienced a real boom. Restrictions in everyday life, no restaurant visits, canceled vacations - many people suddenly had more money in their bank accounts that they actually wanted to spend. And what happened? The luxury companies' marketing machines were running at full speed. Influencers, FOMO, exclusivity - luxury became the new must-have.

T-shirts that might cost 1 dollar to produce were sold for 500-1000 dollars. Bags without a logo were suddenly considered worthless. And champagne only Moët, please - nothing else. You either belonged - or you didn't. Clever hype, without question. The companies were delighted. Record sales, new stores, more staff.

But now? Inflation, price rises, economic headwinds. Official inflation may be 0.3-0.4 % - in reality, we are all feeling something completely different. Housing, food, travel - everything is becoming significantly more expensive. And this is having an impact: the middle class, which helped fuel the luxury boom, is slowly returning to its senses. A Gucci shirt for 1000 dollars? No longer bought. Many items end up on platforms second-hand at a 90% discount - in the hope of getting at least a fraction of the money back.

Of course, there is always a small target group that can and wants to afford real luxury - no question about it. But the mass hype? Over in my opinion. Similar to watches, Pokémon cards, expensive wine & whiskey - it was a trend. And trends pass.

The current economic and geopolitical outlook does not exactly point to a new boom in this sector. There is also a growing awareness: Paying $1,000 for a shirt that's already crumbling after seven washes doesn't exactly seem like a smart decision to many, looking back.

I don't want to make a blanket statement here: "Luxury is bad" - on the contrary, I love beautiful things just as much. But for me, it's not an investment, it's a desire, a pleasure - like a nice car or a good watch.

Conclusion: The current weakness of LVMH & Co. comes as no surprise to me. It will be interesting to see what happens next. But my capital is flowing into other sectors for the time being.

$MC (+0.26%)
$MONC (+0%)
$1913 (-1.9%)
$BOSS (+0.26%)
$RMS (-2.94%)
$CDI (+0.81%)
#luxus
#luxusmarken

$MC (+0.26%) - Failed takeovers of LVMH

and activities of the children of Bernard

Arnault

Did you know the following:

In the late 90s, LVMH tried to take over Gucci, but CEO Domenico De Sole resisted.

He diluted the share price and gave employees a stake, weakening LVMH's control. Then Kering stepped in and secured Gucci.

He also tried Hermes:

In 2010, LVMH secretly acquired 17 percent of Hermès ($RMS (-2.94%) ), triggering a storm of indignation. Hermès fought back with legal disputes and accused LVMH of insider trading and share manipulation.

After years of conflict, LVMH agreed to sell its 23% stake in 2014, ending the intense rivalry.

Who will be the next takeover candidate?

Thanks to all the successful takeovers, LVMH now has an extensive portfolio of 75 brands, which can be seen in the picture.

LVMH is the largest luxury company in the world.

The Arnault family:

Bernard will probably keep the company in the family. As he has five children who are already integrated into the company, these are the potential successors:

1. Delphine

2. Antoine

3. Alexandre

4. Frederic

5. Jean

Delphine (49) is Executive VP of Louis Vuitton.

Delphine has been with LVMH since 2001 and is in charge of brand development and strategy. She plays an important role in the success of LV.

Antoine (47) is CEO of Berluti and Chairman of Loro Piana.

Antoine focuses on expanding LVMH's presence in luxury fashion and plays a role in brand communication and acquisitions.

Alexandre Arnault (32) is CEO of Tiffany & Co.

Alexandre revitalized Tiffany by targeting younger audiences and improving its digital presence. As a result, profits doubled within a year.

Frédéric Arnault (29) is CEO of LVMH Watches. After being CEO of Tag Heuer.

Jean Arnault (26) is Director of Product & Communications at Louis Vuitton Watches.

Finally, a few examples of LVMH's pricing power and price trends:

$MC (+0.26%)
$KER (-3.95%)
$RMS (-2.94%)
$MONC (+0%)
$BRBY (-0.02%)
$BOSS (+0.26%)

Bought $MONC (+0%) a 46.40€.

The rest of the portfolio 🚀

$MMM (+0.24%) +40%

$SOLV WI (+0.31%) und. (Demerger of 3M)

$PYPL (+0.27%) +32%

$MCD (+0.17%) +24%

$BTI (-1.1%) +16%

Other ~ 4%

$VOW (+0.19%) -28%

Moncler has reported very good quarterly figures. Sales have increased well and the outlook is also good. Business was particularly good in Asia.

In the long term, I see strong growth potential, especially through the "direct to consumer" channel. Geographically, the company can still achieve a lot of growth in America, where it is not yet so strong.

I am invested and will buy again if the opportunity arises.

I think the worst bets here are on LVMH, but Moncler is still smaller, more focused and the net margin is also somewhat higher than that of "Big Brother".

$MONC (+0%)

A little luxury in the depot 😁✅