Bain & Co., a leading consulting firm, estimates that luxury goods sales will fall 20% in the first half of 2009 before stabilizing in the second half. In all, Bain expects luxury goods sales will fall 10% for the year. In October, Bain was forecasting a drop of just 7%, but conditions have deteriorated quite a bit since then.

The Wall Street Journal reports (subscription required) that "The U.S., which accounts for roughly a third of luxury-goods sales, is one of the worst-hit markets. Bain expects U.S. sales of high-end clothing, accessories, tableware, cosmetics and jewelry will drop by 15% this year. That compares to expected sales declines of about 10% in both Europe and Japan."

Continue reading Luxury sales to fall 20% in first half of 2009

Luxury sales to fall 20% in first half of 2009 originally appeared on BloggingStocks on Sun, 12 Apr 2009 13:40:00 EST. Please see our terms for use of feeds.

Last year, however, a Canadian con artist was accused of expanding the repertoire of imitation Guccis, offering fake stock options in the the Gucci Group. Claiming that he was a member of the Gucci board and was tasked with creating an influx of cash, Timothy Khan sold over $7 million in nonexistent Gucci stock in 1995. By 1996, the investor who had purchased the counterfeit stock was demanding that Khan sell it. Offering a variety of excuses, backed up by a variety of seemingly official documents, Khan held on to the investor's money for a further eleven years. On March 19, Khan pled guilty to two counts of securities fraud and wire fraud. Each count carries a maximum sentence of twenty years in jail, and Khan's sentencing is set for June and will be held in Manhattan federal court.

Suddenly, a $20 knockoff purse doesn't seem like such a big deal!

Counterfeit Gucci: It's not just handbags! originally appeared on BloggingStocks on Thu, 27 Mar 2008 15:14:00 EST. Please see our terms for use of feeds.

Assuming that Prada's IPO plans are indeed unfazed by the luxury market bloodshed, there are two possible scenarios:

1. Prada plans to go ahead with a June IPO because it believes the market will be kinder to luxury goods stocks by then, which would be bullish for the industry now.
2. Prada plans to do the IPO in June because raising money after that will only be more difficult.

Prada to go forward with IPO originally appeared on BloggingStocks on Fri, 08 Feb 2008 12:27:00 EST. Please see our terms for use of feeds.

With luxury stocks off to a horrific start to the year -- Coach (NYSE: COH) and Tiffany (NYSE: TIF) already down in the neighborhood of 20% -- this might seem like a strange time for Prada, one of the world's top high-end fashion houses to take itself public.

But according to the Wall Street Journal, Prada's IPO is still scheduled [subscription required] for June. Miuccia Prada and her husband, Prada CEO Patrizio Bertelli, own 95% of the company, and had previously said that market conditions would be a factor in the timing of the IPO.

Assuming that Prada's IPO plans are indeed unfazed by the luxury market bloodshed, there are two possible scenarios:

1. Prada plans to go ahead with a June IPO because it believes the market will be kinder to luxury goods stocks by then, which would be bullish for the industry now.
2. Prada plans to do the IPO in June because raising money after that will only be more difficult.

Remember -- the insiders at Prada have a better read on this market than just about anyone, and the IPO schedule/details are an important barometer of the industry's health.

Prada to push ahead with June IPO -- bad timing? originally appeared on BloggingStocks on Thu, 17 Jan 2008 13:45:00 EST. Please see our terms for use of feeds.

Oakley's future's so bright, it's gotta wear shades originally appeared on BloggingStocks on Thu, 21 Jun 2007 17:30:00 EST. Please see our terms for use of feeds.

Gallery: Smartphones, Superphones

Continue reading Smartphones, superphones: iPhone, LG Prada, and Treo + Foleo compared

Smartphones, superphones: iPhone, LG Prada, and Treo + Foleo compared originally appeared on BloggingStocks on Tue, 05 Jun 2007 19:45:00 EST. Please see our terms for use of feeds.

Continue reading LG Prada reviewed: How the Prada phone scores in usefulness and coolness

LG Prada reviewed: How the Prada phone scores in usefulness and coolness originally appeared on BloggingStocks on Tue, 05 Jun 2007 08:30:00 EST. Please see our terms for use of feeds.

Can't wait for iPhone? Special-order this $300k cell phone originally appeared on BloggingStocks on Tue, 29 May 2007 17:21:00 EST. Please see our terms for use of feeds.

Move over Coach (NYSE: COH). Prada may be planning its own IPO. According to the Financial Times, CEO Patrizio Bertelli has hinted that the Prada could go public in the next year, and it's currently looking for an investor relations director.

The Italian company may need the cash to expand aggressively into China, Brazil, and India, as well as to increase its presence in the United States and in Japan. Based on its sale of 5% of the company to Intesa Sanpaolo last year, the company is worth at least $2.7 billion. Given sales of about $1.9 billion in 2006, that would give the stock a pretty conservative price/sales multiple.

Considering the recent strength of Coach, this is an IPO that investors would probably be hungry for -- I may have to buy my mother a few shares. If you're going to invest in fashion and apparel stocks, I think the high-end names are the way to go. Companies like Crocs (NASDAQ: CROX) that don't have strong, established brands could see their competitive advantages wane as competitors move in in search of their high margins. Prada seems to have a pretty good moat.

An IPO for Prada? originally appeared on BloggingStocks on Sun, 29 Apr 2007 16:40:00 EST. Please see our terms for use of feeds.

This week, LG Electronics (based in South Korea) is getting a bit more fashionable. The company is going to launch a sleek new cell phone. In fact, it is without buttons, as is the case with Apple, Inc.'s (NASDAQ:AAPL) new iPhone. But, instead of creating a new brand, LG is teaming up with Prada.

I had a chance to interview Donna Flagg, who is a branding expert and the CEO of The Krysalis Group. According to her:

"It makes perfect sense for Prada to extend into cell phones because the strength of their brand is in accessories, and in today's times the cell phone has become perhaps the ultimate accessory. And since Prada typically appeals to a post-college customer, what better way to attract younger generations than to make their most valued possession (or one of them at least) into a status symbol at the same time. In fact, technology is to kids what designer labels were to their predecessors - it's a part of how they identify themselves. And unlike fashion labels, technology, especially cell phones, appeals to both genders equally. So as a move, conceptually, it's a good one. But all of that being said, they are competing with iPhone, so aside from the prestige label, the design has to measure up to the $700.00 price point and compete with Apple's ability to produce extremely well designed products."

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Prada phone set to appear on the fashion runway originally appeared on BloggingStocks on Fri, 19 Jan 2007 17:39:00 EST. Please see our terms for use of feeds.