Luxury brands are turning into retailers. Ideally, you'd want to own players that grow space and LFL at the
same time to maximise shareholder value. In reality, retail network growth seems off the menu for most, after the
Chinese land grab.
We update and upgrade our proprietary luxury store database to c.16k addresses for 73 brands. We check
against 2013 data for store growth, geo and channel mix, full vs. off-price mix, productivity trends - by segment,
brand, region.
The future will be about LFL, as space growth opportunities decline. Alpha generation in luxury large
caps hinges today on ferreting out the best self-help endeavours - as companies adapt to a new normal. We
like CFR, LVMH and KER in this light.