(Barcap) Telecom : 1Q Fundamentals vs M&A

Consolidation and M&A remain key drivers of sentiment and valuation for the European Telecoms sector. The EU decision regarding German mobile consolidation is now due in June at the earliest following TEF’s submission of remedies, thus, falling after the 1Q reporting season. At 1Q we see a continuation of the relatively weak trends seen at 4Q, with European wireless in particular remaining under pressure and impacting Vodafone’s outlook for FY15 and other incumbents exposed to European wireless. From a fundamental perspective we continue to favour stocks able to ‘move the dial’, which include UK fixed line stocks (BT/TALK), TNOR and challenger operators taking market share (TNET, Iliad, JAZZ) and direct plays on M&A which include KPN, TEF D.

* Wireless trends to remain tough, consolidation key. We expect tough wireless trends
to remain across Europe, with Vodafone likely to see continued pressure across
European markets. This is likely to manifest itself in relatively weak FY15 guidance but
we note earnings expectations have been significantly rebased in recent weeks. Overall
on our estimates, European mobile service revenue is set to decline by 6.3% in 1Q14
(4.1% ex-regulatory basis). Conversely, we expect stocks such as Iliad, TNET, JAZZ,
TALK and BT to benefit from market share gains in mobile through disruptive MVNO
models (Inside out MVNO - Battle for Nomads).

* Fixed line – pockets of growth. European fixed line trends have been steadily
improving in terms of ABC (Access, broadband and calls) growth since 3Q12 and we
expect 1Q14 to be no different with ABC growth marginally improving to –c3%. This
includes strong pockets of growth such as the UK fixed market where we expect
BT/TALK to continue to benefit from UK fixed line inflation, fibre and TV.

* Moving the dial: In our sector outlook at the beginning of the year we identified three
key areas where Telecom operators could move the dial: (i) organic revenue growth, (ii)
cost transformation, and/or (iii) inorganic opportunities as ways to significantly alter
cashflow profiles across the sector (Moving The Dial). We continue to see these as the
key drivers of stock performance in 2014.

* EM Telco’s: Divergent regulatory trends are in focus. We see asymmetric regulation in
South Africa and Mexico softening the outlook for Vodacom and AMX respectively. In
contrast, potential consolidation in Brazil and Kenya could drive margin expansion. For
MTN the approval of Nigerian mobile money is a key catalyst for the stock, while a
spectrum auction is in focus for TPSA. For the 1Q14, we see the best prospects of real
revenue growth in Nigeria and Kenya supporting our OW ratings on MTN and
Safaricom respectively. Top sector picks also include Turkcell and TIM Brasil.

>>> Mittell (MIT IM) attracts interest of Andrea Bonomi

Mittell attracts interest of Andrea Bonomi - report (translated)
Andrea Bonomi, the Italian financier who owns the Investindustrial private equity fund, is to make a "market friendly" offer for control of Mittel, the listed Italian financial services group, Italian daily Il Sole 24 Ore reported.

The report cited sources with knowledge of the matter who said that Bonomi was in the first instance looking to acquire the 15.3% stake held by Carlo Tassara, the holding of entrepreneur Romain Zaleski.

The item said that Mittel has a market cap of EUR 150m.


,


Source Il Sole 24 Ore

>>> Scania: Swedish Shareholder Association to recommend members to accept Volks

Scania: Swedish Shareholder Association to recommend members to accept Volkswagen's offer (translated)

The Swedish Shareholder Association (Aktiespararna) has decided to recommend the German Volkswagen’s offer for the remaining shares in the Swedish truck maker, Scania, Dagens Industri reported.

The Swedish business daily cited Carl Rosen, Managing Director for Aktiespararna, who said Volkswagen already won the battle for Scania in 2008 when the Swedish investment company Investor relinquished its control. He added accepting the offer of SEK 200 (EUR 22) per share is the “least bad” alternative and that rejecting it could lead to Scania’s share price dropping to SEK 130-140 (EUR 14.3-15.4) per share, the report noted.

Rosen said Scania’s robust quarterly report is not a good enough reason to the reject the offer and pointed out that the association’s and all the analysts’ calculations indicate the offer is a good one.

The item noted Aktiespararna will announce its recommendation to its members today.


Source Dagens Industri

>>> What to look at today - 16/04/2014

US Market closed Higher , with all sxectors in +ve territory, Escalation in Ukraine put pressure on the market during the day, but no real confirmation of real casulaties, rally in the US come after report from Nikkei suggesting sources think Japan will lower its economic outlook in its upcoming April 17 report, and so some specualtion of QE Coming from Japan, volume were above average @ 771mil shares...VIX @ 15.61 -3.10%...Strong earnings from Yahoo and Intel could further help to stall the tech sector meltdown observed in the Nasdaq in recent weeks. Yahoo Q1 was in line with estimates, but shares were up over 5% afterhours as Alibaba grew its revenues by over 65% y/y above $3B. Intel results were also in line with consensus but up in extended session. The company raised its gross margin guidance for FY14 and noted pockets of strength in the PC segment, particularly in enterprise and in the emerging markets...- China released a raft of economic data that were dominated by a slightly better than expected Q1 GDP figures, Industrial production was a bit lower than expected, but retail sales topped estimates. China stats bureau noted consumption a decisive contributor to Q1 GDP growth.

Eur$ 1.3829 S&P Fut+0.52% European Futures +1.48%

Macro
- China’s Economy Grew 7.4% in 1Q Y/y; Est. 7.3%
- *U.S. SERIOUSLY CONSIDERING GROUND FORCES IN POLAND: SIKORSKI

Keep an eye on :
- ASML NA : ASML Cuts 1H Sales Forecast on Logic Order Slowdown
- SPR GY : Axel Springer Afraid of Google Creating ’Supra State,’ FAZ Says
- BLT LN : BHP to Cut Targeted Spending on Potash This Fiscal Year By 25%
- BRBY LN : Burberry 2H Rev. Meets Ests.
- BN FP : Danone 1Q LFL Sales In Line With Ests., Confirms 2014 Forecast
- CRG IM : Carige EU800m Capital Increase to Start in June, CEO Tells Sole
- CSGN VX : Credit Suisse 1Q Net Income Misses Estimates, 1Q Strategic ROE 14%, Reported ROE 8%
- EDF FP : EDF Shows Interest in Buying Greece’s Public Power: Le Figaro
- FGR FP : Eiffage CEO Berger Says Still in Crisis Period: Les Echos
- GEA GR : GEA Group 1Q Sales Rise, Orders Drop; Confirms 2014 Forecast, GEA Sells Heat Exchangers Unit Valued About EU1.3b to Triton, to Use Heat Exchanger Unit Sale Proceeds for Takeovers
- GLEN LN : Glencore Xstrata to Buy Stake in Perkoa Project for $12m
- HOT GY : Hotchief increases satke in Leighton to 60%
- MIT IM : Bonomi May Buy 15.3% Stake in Mittel From Tassara, Sole Reports
- NHH SM : NH Hoteles to Acquire Intesa Sanpaolo Stake in NH Italia Unit
- NXT FP : Euronext Listing Attracts BNP, SocGen Among Holders: Reuters
- RB/ LN : Reckitt Benckiser 1Q LFL Growth Ex-RBP +4%, Matches Estimate
- SBUX US : Starbucks to Move Europe HQ From Netherlands to U.K.: Times Link
- SYNN VX : Syngenta 1Q Sales Match Est., On Track for Sales Growth Target,Says Solid Start to Yr Despite N. America Weather
- TCH FP : Technicolor to Name Didier Lombard as Chairman: Le Figaro
- TEC FP : Technip, Heerema Win Total E&P Angola Contract Worth ~$3.5b
- TSCO LN : Tesco FY Trading Profit Beats Ests.
- ZIGGO NA : Ziggo Says 1Q Was Solid Start to Year; Reiterates 2014 Outlook, 1Q Growth In Internet, B2B; Churn Continues to Drop

>>> Brokers Upgrades & Downgrades - 16/04/2014

>>> Up
*CARGOTEC RAISED TO BUY VS HOLD AT KEPLER CHEUVREUX
*CATLIN RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
*CSR Raised to Buy vs Hold at Liberum
*GENMAB RAISED TO NEUTRAL VS SELL AT GOLDMAN
*PROSIEBENSAT.1 RAISED TO NEUTRAL VS SELL AT CITI
*X5 RETAIL RAISED TO OVERWEIGHT AT MORGAN STANLEY (EARLIER)

>>> Down
*ENEL CUT TO HOLD VS BUY AT SOCGEN
*REMY COINTREAU CUT TO SELL VS HOLD AT SOCGEN
*TERNA CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY

>>> PT Changes
*Campari PT Raised to EU6.7 vs EU6.5 at Kepler Cheuvreux
*De Longhi PT Raised to EU20.5 vs EU19 at Berenberg
*Enel PT Raised to EU4.2 vs EU3.85 at Morgan Stanley
*Enel PT Raised to EU4.45 vs EU4.3 at JPMorgan
*Pop. Milano PT Cut to EU0.71 vs EU0.86 at Goldman
*Snam PT Raised to EU4.05 vs EU3.87 at Morgan Stanley

>>> Initiation
*INTER RAO REINSTATED AT BUY AT BOFAML; PT RUB0.0125
*SOLVAY RATED NEW BUY AT SOCGEN; PT EU130

>>> Call

>>> Asian Update

Asian Market Update: China Q1 GDP slowed less than expected; Retail sales beat makes up for Industrial Production miss

***Economic Data*** - (CN) CHINA Q1 REAL GDP Q/Q: 1.4% V 1.5%E; Y/Y: 7.4% V 7.3%E; YTD: 7.4% V 7.3%E - (CN) CHINA MAR INDUSTRIAL PRODUCTION Y/Y: 8.8% V 9.0%E - (CN) CHINA MAR YTD FIXED URBAN ASSETS Y/Y: 17.6% V 18.0%E - (CN) CHINA MAR RETAIL SALES Y/Y: 12.2% V 12.1%E - (CN) CHINA Q1 BUSINESS CLIMATE INDEX: 128.0 V 124.3 PRIOR - (NZ) NEW ZEALAND Q1 CPI Q/Q: 0.3% V 0.5%E; Y/Y: 1.5% V 1.7%E - (AU) AUSTRALIA MAR WESTPAC LEADING INDEX M/M: 0.0% (3-month high) V -0.1% PRIOR

Market Snapshot (as of 03:30 GMT): - Nikkei225 +2.3%, S&P/ASX +0.6%, Kospi +0.1%, Shanghai Composite +0.3%, Hang Seng +0.7%, Jun S&P500 +0.4% at 1,846, Jun gold -0.2% at $1,297, May crude oil +0.1% at $103.83/brl

***Highlights/Observations/Insights*** - Strong earnings from Yahoo and Intel could further help to stall the tech sector meltdown observed in the Nasdaq in recent weeks. Yahoo Q1 was in line with estimates, but shares were up over 5% afterhours as Alibaba grew its revenues by over 65% y/y above $3B. Intel results were also in line with consensus but up in extended session. The company raised its gross margin guidance for FY14 and noted pockets of strength in the PC segment, particularly in enterprise and in the emerging markets.

- US Treasury released its Semi-Annual Currency Report without naming China an FX manipulator despite the recent reversal in gradual Yuan appreciation. The Treasury also softened its criticism of German imbalances evident in the prior report, and called for Japan's domestic economic policies to focus on boosting domestic demand.

- China released a raft of economic data that were dominated by a slightly better than expected Q1 GDP figures. Sentiment brightened on the release, sending China stocks, AUD and US equity futures higher at the expense of the risk-on funding JPY currency. Industrial production was a bit lower than expected, but retail sales topped estimates. China stats bureau noted consumption a decisive contributor to Q1 GDP growth, and that it may begin releasing online sales figures as well. NBS further stated the property market is generally stable, overall economy is in reasonable range, and employment is sound. Among notable March industrial production components, power generation grew 6.2% y/y and crude oil output rose 2.6%.

- BOJ Gov Kuroda remarks in Parliament were largely a reiteration, expressing confidence in achieving 2% inflation target from end of FY14 to FY15, and that the current policies are having intended effect. Kuroda also noted labor market is becoming considerably tighter, presumably a precursor to upward wage pressures actively sought by policymakers.

- BHP and Fortescue put out their quarterly production figures. BHP Q1 output of iron ore rose 23% y/y, while that of FMG was up 17%. BHP also raised its iron ore production for FY14 by 5Mt to 217Mt, adding that weather-related disruptions have been limited. Fortescue maintained its forecast, but noted strong iron ore demand from China urbanization policies.

***Fixed Income/Commodities/Currencies*** - (JP) BOJ offers to buy 250B in 1-3 yr JGB, 250B in 3-5 yr JGB, 400B in 5-10 yr JGB - (AU) Australia MoF (AOFM) sells A$1B in 3.25% bonds due 2018; Avg yield 3.2885%, bid-to-cover 3.12x - (CN) China MoF sells 10-yr bonds; yield 4.3184% - GLD: SPDR Gold Trust ETF daily holdings rise 0.6 tonnes to 806.8 tonnes (2nd consecutive increase) - (US) API PETROLEUM INVENTORIES: CRUDE: +7.6M (largest build since June 2013) v +1.5Me, GASOLINE: -500K v -1.5Me

- USD/CNY: (CN) PBoC sets yuan mid point at 6.1589 v 6.1571 prior setting (weakest setting since Sept 11th)

- Among the active USD majors, AUD/USD is up over 30pips from the lows above 0.9360 after better than expected China GDP. NZD/USD fell over 30pips below 0.86 after softer than expected Q1 CPI, reaching a low of 0.8577. USD/JPY was boosted by risk-on flows after China data, risking over 40pips above 102.20 - a 1-week high.

***Equities*** US markets: - YHOO: Reports Q1 $0.38 v $0.37e, R$1.09B v $1.08Be; +6.8% afterhours - IBKR: Reports Q1 $0.34 v $0.29e, R$355M v $216M y/y; +3.2% afterhours - INTC: Reports Q1 $0.38 v $0.37e, R$12.8B v $12.8Be; Raises FY14 GM guidance; +1.5% afterhours - CSX: Reports Q1 $0.40 v $0.38e, R$3.01B v $2.99Be; increases quarterly dividend by 7% to $0.16/shr; reaffirms FY guidance; +0.6% afterhours

Notable movers by sector: - Consumer Discretionary: China Southern Airlines 1055.HK -1.2% (Q1 guidance) - Consumer staples: Shandong Denghai Seeds 002041.CN -1.2% (prelim FY13 results) - Financials: Founder Securities 601901.CN +4.5% (FY13 results) - Materials: BHP Billiton BHP.AU +0.5% (Q3 operating results); Fortescue Metals Group FMG.AU -0.2% (Q3 operating results); Silver Lake Resources SLR.AU +3.0% (Q1 production results); Iluka Resources ILU.AU -6.6% (Q1 production results) - Industrials: Xinjiang Urban Construction Group 600545.CN +9.8%, China West Construction Group 002302.CN +7.8%, Xinjiang International Industry 000159.CN +6.5% (Xinjiang related companies continue to trade higher on press speculation); CNR 601299.CN +0.9% (plans HK listing) - Technology: Beijing Ultrapower Software 300002.CN +2.6% (awarded order); Sharp 6753.JP -0.4% (speculation on FY14/15 results)

>>>US after Hours

After Hours Summary: YHOO +6.1%, IBKR +2.0%, INTC +1.5%, CSX +0.4%, LLTC -2.0% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: YHOO +6.1%, IBKR +2.0%, INTC +1.5%, CSX +0.4%

Companies trading higher in after hours in reaction to news: EGLE +13.4% (announced extension to waiver and forbearance agreement), CANA +11.4% (announced the appointment of Munjit S. Johal as Treasurer and Chief Financial Officer), ZGNX +8.6% (confirmed ruling preventing the implementation of Massachusetts Governor's order that prevented access to Zohydro ER), DEJ +7.4% (sees 60% increase in net production at Woodrush), WWE +4.8% (announced WrestleMania launch update: reached record 1 mln households in the U.S.), 

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: LLTC -2.0%

Companies trading lower in after hours in reaction to news: ATHL -1.2% (launched proposed $500 mln senior notes offering; announced 11 mln share public offering of common stock; announced first quarter 2014 production, horizontal well results & increased 2014 outlook: co's average daily production volumes for the first quarter 2014 reached a record high of 16,987 BOE/d as compared with 9,959 BOE/d produced in the first quarter 2013),

>>> US Close Dow+0,55% S&P+0,68% Nasdaq+0,29%

Closing Market Summary: Stocks Post Gains Despite Seeing Intraday Weakness

The major averages finished the session on a modestly higher note, but not before heavy selling pressure sent the Nasdaq Composite (+0.3%) for a test of its 200-day moving average. The S&P 500, meanwhile, added 0.7% with all ten sectors posting gains.

Equities climbed at the open with the advance built on the relative strength of biotechnology and other momentum names. Despite the solid early gains in those areas, the market began fading from its high as multiple reports pointed to an escalation of tensions in Ukraine. Specifically, a skirmish reportedly took place at the Kramatorsk airbase, but there were inconsistencies with regard to the number of injured. Some reports put the number of casualties between four and 11, while others said there were no casualties. After these reports made the rounds, Ukraine's acting President Oleksandr Turchynov was quoted by Interfax as saying the airfield has been retaken from pro-Russian militants.

With participants watching the news from Ukraine, stocks continued their retreat into the early afternoon, while bonds rallied. The defensive sentiment was also present in the foreign exchange market, where the yen strengthened to 101.50 against the dollar.

Strikingly, equity indices notched their lows just after 13:00 ET and spent the next three hours in a sharp rally back into the green in a move that was accompanied by the return of yen weakness that sent the dollar/yen pair to 101.85.

The rally in equities and the dollar/yen pair seemed to follow reports from Nikkei, suggesting sources think Japan will lower its economic outlook in its upcoming April 17 report. Such a headline presumably fueled some speculation that the downgrade will ultimately invite more policy stimulus from Japan, which was music to the ears of a market that has cheered accommodative monetary policy for quite some time.

As a result of the afternoon rally, the S&P 500 returned to its morning high, while the Nasdaq clawed its way back into the green. Like the Nasdaq, biotechnology climbed off its lows, but the iShares Nasdaq Biotechnology ETF (IBB 217.61, +2.24) was unable to reclaim its 200-day moving average. The biotech ETF added 1.0%, while the broader health care sector advanced 1.1%. Contributing to the sector's strength were shares of Johnson & Johnson (JNJ 99.20, +2.06), which added 2.1% after the company beat on earnings.

Elsewhere, energy (+1.3%) and financials (+0.9%) spent the entire day trading ahead of the broader market, which facilitated the afternoon rebound.

Also of note, the utilities sector (+1.3%) ended ahead of the remaining groups after climbing steadily throughout the session. The rate-sensitive sector extended its year-to-date gain to 11.8%, which speaks to the overall cautious posture that has been exhibited by the market so far in 2014.

Treasuries posted gains, but retreated from their midsession highs during the afternoon rally in equities. The benchmark 10-yr yield slipped three basis points to 2.62%.

Participation was a bit above average as 771 million shares changed hands at the NYSE floor.

Reviewing today's data:

* Consumer prices increased 0.2% in March, up from a 0.1% gain in February. The consensus expected the CPI to increase 0.1%. Excluding food and energy, core prices increased 0.2% in March and ended a string of three consecutive months of 0.1% gains. The consensus expected these prices to increase 0.1%. The surprises in both the headline and core indices were mainly the result of stronger-than-expected housing costs. The shelter index increased 0.3% in March and accounted for two-thirds of the gain in the core consumer price index. Housing costs increased 2.7% over the last 12 months, which was the largest yearly increase since March 2008. As expected, drought conditions in the west contributed to stronger-than-normal growth in food prices. Food costs increased 0.4% for a second consecutive month. Year-over-year, food prices are up 1.2%, which is the largest yearly gain since August 2012.  * The Empire Manufacturing Survey for April registered a reading of 1.3, which was down from the prior month's reading of 5.6. Economists polled expected the survey to improve to 7.5.  * The April NAHB Housing Market Index rose to 47 from 46 while the consensus expected the reading to increase to 50. 

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET, while March Housing Starts will be announced at 8:30 ET. March Industrial Production and Capacity Utilization will both be reported at 9:15 ET, while the day's data will be topped off with the Federal Reserve's Beige Book for April. The report will be released at 14:00 ET.

* S&P 500 -0.3% YTD  * Dow Jones Industrial Average -1.9% YTD  * Nasdaq Composite -3.4% YTD  * Russell 2000 -3.7% YTD

RTR- JIMMY CHOO OFFER MAY VALUE CO. AT OVER $1.5B: REUTERS

(Reuters) - Privately owned luxury group Labelux has hired Bank of America Merrill Lynch (BAC.N) to advise it on a possible London market flotation of Jimmy Choo this autumn that could value the upmarket shoemaker at over 900 million pounds ($1.5 billion), industry and financial sources said.

Market conditions permitting, the listing could take place towards the end of the autumn, in November, with Labelux seen selling a 25 percent stake, the sources said. Merrill Lynch declined to comment.

Labelux is owned by Joh. A. Benckiser (JAB), the investment holding company of the Reimanns, the German billionaire family associated with Reckitt Benckiser (RB.L), the cleaning and household products maker.

JAB still owns 10.6 percent of Reckitt Benckiser and with associates over 70 percent of fragrances and beauty products company Coty (COTY.N), which last year netted JAB nearly $800 million from its IPO in New York.

Labelux acquired Jimmy Choo in 2011 for more than 500 million pounds ($837 million) from investment firm TowerBrook Capital Partners and hopes that the name, its growth track record and prospects in new markets will attract investors. Jimmy Choo stilettos have been endorsed by a variety of celebrities such as Sarah Jessica Parker, who famously mentioned them in the Sex and the City TV series.

Jimmy Choo is part of a rapidly growing list of companies eyeing an initial public offering in London. If it goes ahead, it would be the most significant luxury goods IPO since the Milan listing of Moncler (MONC.MI) in December, which valued the Italian down jacket maker at 2.55 billion euros ($3.52 billion).

Moncler's IPO valued it at 12 times forward earnings before interest, tax, depreciation and amortization (EBITDA).

Industry sources said Jimmy Choo could hope to get a valuation of at least 13 times EBITDA as its closest peer, Italy's Salvatore Ferragamo (SFER.MI), also focused on shoes, was trading on 13 times forward underlying earnings.

LUXURY LABELS

The British brand was founded in the 1990s by Jimmy Choo, a Malaysian bespoke shoemaker in London's East End, who developed the business with Tamara Mellon and help from her father Tommy Yeardye, who co-founded the Vidal Sassoon hairdressing chains.

While Mellon and Chief Executive Joshua Schulman left shortly after Labelux acquired the brand, Jimmy Choo's niece Sandra Choi is still the brand's creative director.

Proceeds from the flotation would be used to finance the development of Labelux's remaining luxury brands, particularly lossmaking British motorbike-inspired fashion brand Belstaff and Swiss leather goods maker Bally, the sources added.

"The idea is to have access to public markets, and the proceeds would be ploughed into the Labelux group, not so much in Jimmy Choo, which is well funded, but in the group's other brands," a source close to JAB said.

Bally, which has been struggling to find its direction, last year hired Frederic de Narp, a former Richemont (CFR.VX) group veteran to craft its strategy, aided by creative director Pablo Coppola who was previously with Tom Ford and Christian Dior.

JAB'S LUXURY BRANDS INTEREST

With Labelux mulling a flotation of its prized asset there has been a suggestion by some fashion industry executives and bankers that JAB's interest in its luxury business might be waning, having not bought any brand since Belstaff in June 2011.

"There were a lot of luxury labels that went up for sale in the past few years that did not require fortunes to buy them, but they (Labelux) did not touch them," one London-based banker specializing in luxury goods said.

Labelux was offered several potential targets such as Italian tailor Brioni and jeweler Pomellato but let both brands fall into the hands of Gucci's owner Kering (PRTP.PA), for example, the banker said.

But the source close to JAB said Labelux would return to the acquisition trail once it had sorted out internal issues such as hiring a new CEO for Belstaff, deciding on Jimmy Choo's flotation and making progress with Bally's turnaround.

"The group will be looking at buying more companies once it has consolidated what it already has," the source said, adding that it would decide by the summer on the IPO.

Since it was created in 2007 Labelux has lost many of the original management and creative teams it took on.

At Belstaff Harry Slatkin, who made his name in scented candles, left last year as chief executive but still retains a small stake in the brand with long-time friend Tommy Hilfiger, who had been brought in as a consultant.

Belstaff, a once-dormant outerwear company founded in 1924, has invested vast sums in flagship stores and brand ambassadors such as actor Ewan McGregor and footballer David Beckman but still needs to fine-tune its strategy, fashion industry executives and consultants say.

Meanwhile JAB has shown more interest in coffee than beauty or luxury in the last two years, acquiring Caribou Coffee Company for $340 million, Peet's Coffee & Tea for $1 billion and D.E. Master Blenders 1753, owner of Douwe Egberts coffee, for about 7.5 billion euros.

In 2012 Labelux sold two brands back to their original owners, jeweler Solange and fashion brand Derek Lam.

"There are more opportunities for consolidation in luxury and in coffee than there are in beauty," the source close to JAB said.

Labelux declined to comment for this story.