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Why Saint Laurent Is Heading to the Champs-Élysées
A four-story boutique is slated to open in summer 2023.
The hoarding for store is a mirrored surface.
“I wanted to realize one of Yves Saint Laurent’s wishes when he arrived in Paris and said he wanted his name to be written in fiery letters on the Champs-Élysées.”
So says Anthony Vaccarello, creative director of the house of Saint Laurent, who is fulfilling that wish with the striking, mirrored hoarding that foreshadows a major opening on the avenue planned for summer 2023.
The future Saint Laurent store on the Champs-Élysées.
COURTESY
According to the house, the designer expressed that ambition in 1983, when the Costume Institute at the Metropolitan Museum of Art in New York hosted a major Yves Saint Laurent exhibition — the first retrospective of a living couturier’s work.
The forthcoming unit at 123 Avenue des Champs-Élysées marks the latest expansion vector for the Kering-owned fashion house in its hometown.
In 2019, the brand opened Saint Laurent Rive Droite, a new retail format selling everything from Jean Prouvé chairs to Saint Laurent-branded condoms in the iconic location on Rue Saint-Honoré previously occupied by concept store Colette.
“The Champs-Élysées is surely a point of reference for locals, either based in Paris or in the rest of France, on top of being a touristic destination for foreigners coming from abroad,” said Francesca Bellettini, chief executive officer of Saint Laurent, disclosing the thinking behind the retail opening in an exclusive interview with WWD. “Guaranteeing Saint Laurent’s outstanding presence in this venue marks an important milestone for the maison, which definitely deserves to be represented in this iconic Parisian location.”
Despite multiple challenges for the celebrated thoroughfare in recent years, it remains a magnet for luxury brands, with Moncler and Dior, Saint Laurent’s next-door neighbors, among recent arrivals.
Before the pandemic, the Champs-Élysées drew 100,000 people a day, with 71 percent of traffic coming from tourists, according to a study commissioned by the Comité des Champs-Élysées, which is working to rejuvenate the street, which is billed as the most beautiful avenue in the world, but has a poor image locally.
Footfall on the avenue plunged by 44 percent between March 2020 and March 2021, a study by Cushman & Wakefield and MyTraffic found. That made it one of the more resilient high streets in Europe, as London’s Oxford Street recorded a 71 percent drop, while Gran Via in Madrid was down 63 percent, the report said.
And after a tough few years, which included demonstrations by anti-government gilets jaunes protesters and several rounds of pandemic-related closures, there are signs that business is picking up.
Saint Laurent is taking up a space previously occupied by a restaurant, a small store and offices, making the unit the French brand’s largest in Paris.
Asked if she was concerned about the dearth of visitors to Paris, once flush with tourists from China, Russia, the U.S and elsewhere, Bellettini was sanguine.
The mirrored facade fractures the architecture of neighboring buildings.
HERVE ABBADIE
“At Saint Laurent, we have always been very focused on the local clientele in every market, because if you conquer people in their own country, they seek of you even when traveling,” she said. “This strategy has always helped us succeed, and it has been even more valuable during this particular time.”
Indeed, she noted that “the brand continues to grow compared to 2019, despite the lack of tourism. We have a very strong growth in locals in every market. We have seen growth in our physical stores and digital channels.”
The executive credited “retail excellence, outstanding service and an unmatched customer experience” for driving that growth.
“The Champs-Élysées store will surely enhance an holistic connection with the brand, attracting both locals and, when they resume, tourists,” she added.
Comparable sales at Saint Laurent were up 28.1 percent in the third quarter of 2021 version the prior year, with Kering touting “outstanding” momentum in North America and Western Europe.
As of June 30, the Saint Laurent network comprises 251 directly operated stores, reflecting Bellettini’s belief that physical stores still have an important role to play, even in an increasingly digital world.
“We see many opportunities in our current stores, in selected enlargements and — as in this case — in new openings,” she said, arguing that “there is no complete brand experience without physical stores and an omnichannel approach.”
She noted that customer response “to the Saint Laurent store experience is very strong and we attract an outstanding mix of clients to the Saint Laurent universe. As we look to the future, we will continue to invest in both brick-and-mortar and e-commerce.”
The brand is keeping under wraps its intentions for the sprawling Champs-Élysées site, which is to showcase the brand’s complete product universe.
The mirrored hoarding is to remain in place throughout the duration of the construction works.
SoftBank Finalizing $4 Billion Loan From Apollo-Led Group
Deal shows Japanese conglomerate’s need for cash and Apollo’s push into lending
SoftBank Group Corp. 9984 +0.43% is finalizing a $4 billion loan from Apollo Global Management Inc. APO 4.84% backed by SoftBank’s stable of technology-startup stakes, as the Japanese conglomerate seeks to weather turbulence in its portfolio.
The loan would be secured by SoftBank’s second Vision Fund, people familiar with the matter said. That roughly $40 billion pot includes stakes in 150 companies such as Indian e-commerce giant Flipkart; digital-banking startup Revolut; and Cameo, a site where celebrities sell personalized messages. SoftBank can use the money for a range of purposes, one of the people said.
The deal between the investing giants shows SoftBank’s ravenous need for cash and highlights Apollo’s push into lending, a territory traditionally dominated by banks.
Using borrowed money to make investments, rather than its own cash, would increase SoftBank’s profits if those bets turn out to be winners—and exaggerate losses if they sour.
SoftBank, whose holdings range from Japanese telecoms to European chip makers and Silicon Valley startups, has previously tapped its various holdings to borrow. Last spring, it arranged an $8 billion loan from a group of banks secured by its stake in Chinese e-commerce giant Alibaba Group Holding Ltd.
The initial Vision Fund, launched in 2016 with about $100 billion, was the biggest pool ever assembled for private investing. SoftBank spent it at a brisk pace—on everything from ride-hailing apps including Uber Technologies Inc. to indoor-farming startups and artificial-intelligence companies. It famously bet big on WeWork Inc., the co-working company that flamed out before its eventual listing.
The fund relied heavily on leverage, with $40 billion of its capital coming in the form of preferred stock carrying a 7% interest rate that is held by Abu Dhabi sovereign-wealth fund Mubadala Investment Co. and Saudi Arabia’s Public Investment Fund. The preferred stock has had the effect of magnifying wins and exacerbating losses.
The sequel fund was to be even bigger, but outside investors stayed away, disillusioned by bad bets such as WeWork and the chaotic way the Vision Fund had operated. SoftBank instead had to rely on its own cash to make investments, but it hasn’t stopped the fund from investing at a breakneck pace that shows no sign of letting up.
That cash has been in shorter supply. In November, SoftBank reported a $3.5 billion quarterly loss, hurt by China’s crackdown on tech companies. Its stake in Chinese ride-hailing company Didi Global Inc., for which it paid $12 billion, was valued at $7.5 billion. The stake in Alibaba, its largest holding, has declined by half over the past year. In total, the value of SoftBank’s assets fell by $54 billion over the previous quarter.
“We are in the middle of a blizzard,” SoftBank Chief Executive Masayoshi Son told reporters.
In another setback, the U.S. Federal Trade Commission this month sued to block Nvidia Corp.’s proposed takeover of SoftBank-owned semiconductor-design specialist Arm Holdings, arguing the deal is anticompetitive.
SoftBank has pledged to spend at least $9 billion buying back its own shares, which have lost about half their value since February. That buyback is on top of a $20 billion share-repurchase program completed earlier this year.
As of the end of September, SoftBank valued the second Vision Fund at $38 billion. Several of its holdings have recently gone public, including Chinese grocery startup Dingdong Ltd. and robotics company AutoStore Holdings Ltd.
Apollo and its insurance affiliate, Athene Holding Ltd. ATH 4.84% , plan to lead the SoftBank loan, which would bear a mid-single-digit interest rate, joined by a group of investors including mutual funds, endowments and financial institutions, one of the people said.
Providing big loans is increasingly of interest to asset managers and private-equity firms. Last year, Apollo led a $4 billion bankruptcy loan for Hertz Global Holdings Inc. in partnership with Athene. In October, executives said Apollo was on track to make 30 loans of over $1 billion this year, up from one in 2019.
Apollo and some of its peers are often able to underwrite complex deals that a bank wouldn’t touch because they don’t fit neatly into an established category. While most private-equity funds use leverage to do deals, SoftBank’s Vision Fund invests in earlier-stage companies that typically aren’t producing cash flows to support debt.
Apollo, which expects to complete a deal in January to buy the piece of Athene it doesn’t already own, needs a constant supply of new debt deals in which to invest the insurer’s assets.
On Monday, Athene said it would buy a company that finances clean-energy projects at commercial properties, the latest in a string of similar deals for lending businesses it has struck this year. This summer, Apollo was the runner-up bidder for GreenSky LLC, a home-improvement and medical lender that is being sold to Goldman Sachs Group Inc., people familiar with the matter said.
Maersk Nears Deal to Buy LF Logistics for About $3 Billion
Deal would expand ocean shipping giant’s push into land-based distribution
A.P. Moller-Maersk AMKBY 0.26% A/S is in advanced talks to acquire LF Logistics for around $3 billion, according to people familiar with the matter, a move that would give the ocean shipping giant a network of warehouses.
An announcement could come as soon as Wednesday, assuming the talks don’t break down, the people said.
Maersk, the world’s largest container shipping line by capacity, has been reaping the benefits of the rattled global supply strains that have pushed up ocean freight rates to record levels this year and caused backlogs at U.S. ports.
It has been using acquisitions to expand beyond ocean freight into inland logistics. It wants to capture a bigger share of the market moving goods between Asian and U.S. ports, and then from ports into warehouses or businesses and even the last mile to a person’s home.
By acquiring LF Logistics, an arm of Hong Kong supply-chain manager Li & Fung Ltd., Maersk gains control of a network of 223 distribution centers across Asia and more than 250 customers globally, according to LF’s website. LF also provides freight forwarding services for retailers, manufacturers and other cargo owners.
The deal would come less than six months after Maersk bought two e-commerce logistics companies in August—one in the U.S. and one in Europe—or a total of nearly $1 billion. The acquisition of LF would dwarf these deals but the Copenhagen-based company had already signaled its appetite for bigger acquisitions, bolstered by its strong earnings growth.
Maersk reported a profit of $5.44 billion for the September quarter, more than five times the profitit had a year ago when results were weighed down by the economic slowdown resulting from pandemic restrictions. Revenue jumped 68% to $16.61 billion, amid a surge in freight rates.
The LF deal would be Maersk’s biggest move so far to boost its inland logistics business which it hopes will eventually bring in half the group’s earnings. At the moment, around 80% of revenue comes from ocean operations.
Based on a price of around $3 billion, Maersk is paying more than twice LF Logistics’s value of $1.4 billion in 2019 when Singapore’s Temasek Holdings Ltd. acquired nearly a 22% stake in the business.
Maersk’s top competitor, Geneva-based Mediterranean Shipping Co. on Monday made a $6.4 billion offer to buy the African logistics assets of French-based conglomerate Bollore SE. If the deal goes through, it will give MSC control of 16 terminals in the Ivory Coast, Ghana, Nigeria and Gabon along with three rail concessions.
France’s CMA CGM SA, the world’s fourth-largest container ship operator, bought in 2019 Swiss-based freight services provider Ceva Logistics AG for $1.7 billion.
Maersk has around 70,000 ocean customers that include U.S. retail chains, car makers, furniture suppliers, electronics makers and clothing importers. But less than a quarter of those customers use the company to move their goods from ports to warehouses and distribution centers.
Maersk signed in early December a four-year contract with British-based consumer products giant Unilever PLC to manage ocean and airfreight transport.
Maersk’s last big acquisition was the 2017 purchase of Hamburg Süd for $4.2 billion, which consolidated its position as a leader in container shipping.
Chinese investors pick luxury watches over houses
The wealthy are spending their extra cash on Rolexes as rare downturn grips property sector
China’s once enthusiastic property investors are turning their attention to luxury watches as a better store of value in the face of slowing economic growth and President Xi Jinping’s intensifying campaign against housing speculation.
Multiple high-end watch resellers told the Financial Times that business had taken off in recent months as wealthy individuals stopped buying additional homes and instead spent their extra cash on luxury timepieces such as Rolex and Patek Philippe.
The shopping spree, said experts, has contributed to a 40 per cent surge in China’s imports of Swiss watches in the first 10 months of this year even as the broader economy cooled off.
Camille Gaujacq, an analyst at Daxue Consulting, a Shanghai-based market research firm, said a downturn in the real estate industry, once the “go-to investment” for China’s wealthy class, had prompted many to look for alternatives.
“Luxury watches can be the answer,” said Gaujacq.
Property has been a one-way bet in most Chinese cities since the country’s urban housing market was liberalised in the late 1990s. But Xi’s determination to deliver “common prosperity”, as well as the collapse of China Evergrande Group and other highly leveraged property developers, has led to a rare downturn in real estate prices over recent months.
Analysts and property buyers increasingly expect the downturn to continue. The Chinese Communist party’s politburo recently reiterated Xi’s assertion that “houses are for living in, not speculation” even as it takes measures to support the broader economy.
On Monday China’s central bank announced a five basis-point reduction in its one-year “loan prime rate” to 3.8 per cent but left the five-year rate, used to price mortgages, unchanged at 4.65 per cent.
While consumer demand has taken a hit from the economic downturn, high-end timepieces have gained popularity among the wealthy. An October survey of 1,500 Chinese adults with more than Rmb500,000 ($78,370) in annual household income by CSG Intage, a Hong Kong-based consultancy, found that 88 per cent of respondents planned to keep or increase spending on luxury watches, which cost Rmb76,700 on average, in the following 12 months.
“The top end of the watch market is very strong,” said Simon Tye, author of the study. “If you go to a Rolex shop right now, it won’t have enough [watches] to sell to the customers.”
For many rich buyers, luxury timepieces are not only a marker of social status but also a hedge against inflation.
In the eastern province of Jiangsu, Sam Yu, owner of an electric heater manufacturer and two apartments, thought his purchase of a Rmb700,000 Patek Philippe watch in August was a “wise” investment.
“After two years I can sell the watch for a small profit,” said Yu, who made his most recent home purchase five years ago, “I won’t be able to do this with an apartment. Given policy uncertainties, it may take many months to find a buyer unless I offer a deep discount.”
According to Watcheco, China’s leading online platform for second-hand timepieces, many high-end brands have increased steeply in value over recent years. Popular models such as Rolex Submariners can now command as much as five times their original price.
“There is a lot of demand for and a lack of supply of certain high-end models,” said David Wang, a Shanghai-based luxury watch reseller. “Prices are unlikely to soften in the foreseeable future.”
A third driver of the luxury watch boom is their portability, which provides an easy way for wealthy citizens to transfer assets abroad if needed. Wang said some of his customers spent tens of thousands of dollars on a timepiece so that they could evade strict capital controls that impose an annual limit of $50,000 for individuals’ overseas remittances.
“Customs officials either won’t notice your watch or may not know how much it is worth,” said Wang. “That creates a safe and efficient way to take your money abroad.”
Closing Stock Market SummaryThe S&P 500 rallied 1.8% on Tuesday, bouncing back from a three-day skid amid a buy-the-dip mindset. The Dow Jones Industrial Average rose 1.6% while the Nasdaq Composite and Russell 2000 outperformed with 2.4% and 3.0% gains, respectively.
Nine of the 11 S&P 500 sectors closed higher, paced by the energy (+2.9%), information technology (+2.6%), consumer discretionary (+2.5%), and financials (+2.0%) sectors with 2-3% gains. The defensive-oriented utilities (-0.2%) and consumer staples (-0.1%) sectors were the exceptions.
There was a shift in sentiment, precipitated by a belief that the market had gotten oversold on a short-term basis and was due for a rebound. Conviction in buying efforts increased as the S&P 500 reclaimed its 50-day moving average (4614) after closing below the key technical level yesterday.
The mega-caps solidified the rally effort later in the day after a slow start to the session. The Vanguard Mega Cap Growth ETF (MGK 255.18, +5.77, +2.3%) advanced 2.3% after being up just 0.1% at its session low.
To be fair, there were some positive-sounding news in the mix. President Biden said the U.S. is "absolutely not" going back to March 2020 in terms of lockdowns and having to worry about serious infection. Separately, reports suggested that the door is still open for Senator Manchin (D-WV) to get on board with the Build Back Better Act.
Nike (NKE 166.63, +9.65, +6.2%) and Micron (MU 90.68, +8.65, +10.5%) supported their own causes with better-than-expected earnings reports, and the positive reactions carried over to the retail and semiconductor spaces. The SPDR S&P Retail ETF (XRT 87.77, +2.62) gained 3.1%. The Philadelphia Semiconductor Index gained 3.4%.
The rebound-minded action extended beyond equities. Briefly, Treasury yields settled higher in a curve-steepening trade, WTI crude futures rose 3.6%, or $2.45, to $71.11/bbl, copper futures rose 1.2% to $4.347/lb, and even cryptocurrencies saw some relief.
The 2-yr yield rose five basis points to 0.67%, and the 10-yr yield rose seven basis points to 1.49%. The U.S. Dollar Index decreased 0.1% to 96.49. The CBOE Volatility Index dropped 8.1% to 21.01, as hedging interest waned with the bullish price action in the major indices.
Reviewing Tuesday's economic data:
- The Current Account Balance for the third quarter totaled $214.8 billion (consensus -$204.8 billion). The second quarter deficit was upwardly revised to $198.3 billion from $190.3 billion.
Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for December, Existing Home Sales for November, the third estimate for Q3 GDP, and the weekly MBA Mortgage Applications Index on Wednesday.
- S&P 500 +23.8% YTD
- Nasdaq Composite +19.0% YTD
- Dow Jones Industrial Average +16.0% YTD
- Russell 2000 +11.6% YTD
After Hours Summary: BB +1.5% modestly higher on earnings; VOYA jumps +8.3% on being added to S&P MidCap 400; CAMP -13.5%, RKLY -7.4%, AIR -6% lower on earnings/guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: BB +1.5%
Companies trading higher in after hours in reaction to news: VOYA +8.3% (to join S&P MidCap 400), KRMD +6.2% (receives FDA 510k clearance expanding on-label use to two additional SCIg drugs), MX +3.5% (approves $75 mln share repurchase program), HGTY +1.4% (stock offering), NFE +0.9% (executes MOU with Mauritania for "Fast LNG" project), GSK +0.8% (LGND expands collaboration and license agreement with GSK), NVAX +0.6% (WHO SAGE gives interim recommendations for its COVID-19 vaccine; also announces initiation of PREVENT-19 study of booster doses of NVX-CoV2373), CAC +0.5% (increases dividend), AZN +0.4% (begins production on Omicron-targeted vaccine version, according to FT), PBR +0.4% (files mixed securities shelf offering), NVRO +0.1% (settles patent lawsuit with Nalu Medical), TAK +0.1% (receives CRL from the FDA for NDA for TAK-721 for eosinophilic esophagitis), AGCO +0.1% (to acquire Appareo Systems)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: CAMP -13.5%, RKLY -7.4% (lowers revenue guidance after deciding to not proceed with its technical sale to its JV partner after a US govt action), AIR -6% (also approves $150 mln share repurchase program), PIK -2.1%
Companies trading lower in after hours in reaction to news: BFRI -2.8% (stock offering), EIGR -1.3% (enrolls first patient in LIMT-2 study), PAVM -1.1% (files for $275 mln mixed securities shelf offering), MSGE -0.2% (names new CFO)