Louis Vuitton raises price on popular US bag following new Trump tariffs
[PARIS] Louis Vuitton has increased the price of one of its most popular handbags in the US after the implementation of 10 per cent tariffs on goods coming from the European Union.
The Neverfull GM bag in monogram-coated canvas now costs US$2,200 on the company's US website, US$100 more than last week, a 4.8 per cent price hike.
Luca Solca, an analyst at Bernstein, wrote in a note on Wednesday (Apr 23) that Louis Vuitton has raised its US handbag prices by 3.6 per cent. He said that many products did not see an increase, however, which could indicate they are manufactured in the US. Louis Vuitton has three workshops in the country.
Representatives for Louis Vuitton and LVMH did not immediately reply to requests for comment.
The US generated 24 per cent of LVMH sales in the first quarter.
Luxury groups including LVMH Moet Hennessy Louis Vuitton have warned that they will raise prices to offset the US tariffs imposed earlier this month. Chief financial officer Cecile Cabanis said last week that she believes the group's brands benefit from pricing power, but there will not be a one-size-fits all strategy. Price levels will depend on the brand and the category of products, she added.
While LVMH does not break out financial performance by brand, Louis Vuitton is its biggest label, representing about a quarter of total revenue and more than half of the conglomerate's profit, according to estimates by HSBC.
Louis Vuitton, known for its monogrammed trunks, likely generated 21.6 billion euros (S$32 billion) in sales last year, according to HSBC, making it the world's biggest luxury fashion label.
Hermes International last week announced that it will raise prices in the US as at May 1 to offset tariffs, with details on final pricing still being ironed out. BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
2 days ago
- Business Times
Asia healthcare assets risk overvaluation as private investors scoop them up
[SINGAPORE] As private equity (PE) investors pour money into Asian healthcare, some observers are concerned that this sector could soon overheat. Some recent deals this year include KKR's US$400 million purchase of a 54 per cent stake in India's Healthcare Global Enterprises in February. In Singapore, another American PE firm TPG took Catalist-listed nursing operator Econ Healthcare private in a deal worth nearly S$88 million. When the proposed transaction was announced in February, the offer price represented a 20 per cent premium to Econ's last traded share price on Jan 14. 'We are not the only ones to see the opportunity of healthcare in Asia, and, as a consequence, valuations can be high,' Abrar Mir, co-founder and managing partner of healthcare-focused PE firm Quadria Capital, told The Business Times. Other factors driving investors to the healthcare sector – perceived as defensive, and so able to withstand the ups and downs of economic cycles – is the ongoing macroeconomic uncertainty and volatility in global financial markets. This is particularly so in Asia, where investors have been diversifying away from China in the last few years, to avoid being caught in the cross hairs of the nation's tensions with the United States. As PE firms and their investors focus on acquiring companies independent of China, more deals have been transacted in Japan, South Korea and India, where the demand for healthcare and related services is strong and largely unaffected by tariffs. 'Japan has always been a stable healthcare market, and particularly because of (its) demographics and medical needs,' said David Braga Malta, thematic health principal at Pictet Alternative Advisors, to BT. 'We saw some of the mid-sized Japanese pharma companies being very acquisitive in the recent months and years... And of course, we saw the boom in the IPO (initial public offering) markets in India last year.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Asia's appeal even drew European PE investors to buy South Korean assets for the first time in 2024, he added. Last September, France's Archimed spent US$742 million buying Jeisys Medical, a South Korean developer of aesthetic medicine devices. Like shopping in Louis Vuitton 'One of the key things that I always say to my investors is that... investing in healthcare in Asia is like shopping in Louis Vuitton. So, as an investor, we have to navigate that, be careful not to overpay,' said Quadria Capital's Mir. According to a Bain & Co report, global PE deal value in the sector surged last year to an estimated US$115 billion – the second highest on record. Bain added that PE firms continue to invest in healthcare in the Asia-Pacific, where deal values have been steadily rising since 2016. Industry participants named India as the country attracting the most number of healthcare PE investors. An ageing population, rising incidence of chronic disease and growing awareness of preventive care, combined with the opening up of its insurance market to foreign investment, are making India stand out. Bain estimated that the country made up 26 per cent of the 62 deals transacted in the Asia-Pacific last year. PwC said its health industries practice in India hit a double-digit compound annual growth rate in the past few years as well. But Ling Tok Hong, deals and private equity leader at PwC, cautioned that 'this continued focus on the India market could make it more susceptible to overvaluation if investors are not cautious'. South-east Asia's healthcare sector is also attracting PE investors, leading to 'unprecedented valuations' of Ebitda multiples in their 20s, noted Ling. He was referring to earnings before interest, taxes, depreciation and amortisation. Room for growth; returns still strong Despite the rising valuations in Asia's healthcare sector, market participants point out that there is still room for growth, a key factor backing the higher valuations in the first place. The sector offers attractive long-term growth prospects as the supply of quality healthcare assets in the region is not growing quickly enough to meet demand. In markets such as South-east Asia, 'the number of large, institutionally ready platforms is still limited. This scarcity has helped sustain high entry multiples in recent years', said Alex Boulton, partner and Asia-Pacific lead for healthcare and life sciences private equity at Bain. He pointed out that South-east Asia's healthcare sector relies heavily on private players. For instance, the private sector accounts for roughly half of all hospital beds in Indonesia and the Philippines. 'That structural dynamic creates an enduring role for private capital in expanding and upgrading healthcare infrastructure.' Market participants emphasise that Asian healthcare is not in bubble territory. Boulton pointed out that even with rising valuations, healthcare PE in Asia is still delivering strong returns. Bain's analysis shows that from 2018 to 2023, the median multiple on invested capital (MOIC) for exited healthcare deals in the region was approximately 2.6 – meaning that a US$1 million investment generated a return of US$2.6 million. This compares with the global median MOIC of around two. 'That speaks to the sector's ability to compound value through growth and operational improvement, even in a more expensive entry environment,' noted Boulton. That said, while returns are likely to remain strong in the future, the median MOIC may not be sustained at these levels, he added. Thus, market players said, investors will need to have a clear plan to create meaningful impact and value over the life of their investments.
AsiaOne
4 days ago
- AsiaOne
China says it is working with France on trade differences, no sign yet of a cognac deal, World News
BEIJING/PARIS - China and France have agreed to resolve their trade disputes through dialogue, China's foreign ministry said on Friday (June 6), though there was no indication that agreement had been reached in talks on lifting Chinese levies on European brandy. Talks to resolve the cognac dispute accelerated this week with China's commerce minister Wang Wentao meeting his French counterpart in Paris on the sidelines of an OECD conference, and technical talks on the matter taking place in Beijing. The latest round of negotiations have raised hopes of a settlement, two industry sources with knowledge of the discussions said. "The two sides have reached consensus on resolving economic and trade issues through dialogue and consultation", the Chinese foreign ministry said after a call between the Chinese and French foreign ministers. Chinese anti-dumping measures that applied duties of up to 39 per cent on imports of European brandy - with French cognac bearing the brunt - have strained relations between Paris and Beijing. The brandy duties were enforced days after the European Union took action against Chinese-made electric vehicle imports to shield its local industry, prompting France's President Emmanuel Macron to accuse Beijing of "pure retaliation". The Chinese duties have dented sales of brands including LVMH's Hennessy, Pernod Ricard's Martell and Remy Cointreau. Beijing was initially meant to make a final decision on the duties by January, but extended the deadline to April and then again to July 5. China is seeking to strengthen trade ties with the 27-member bloc as relations with the United States have soured in the escalating trade war. "France will not compromise on ... the protection of its industries, such as cognac," French trade minister Laurent Saint-Martin said after talks with Wang on Wednesday. Chinese officials, meanwhile, signalled to industry officials during three rounds of technical meetings in Beijing this week they wanted to settle the matter, one of the sources said, but added some sticking points remained. With annual imports of around US$1.7 billion (S$2 billion) last year, China is the French brandy industry's most important measured by value and the second-largest by volume after the United States. [[nid:718821]]
Straits Times
5 days ago
- Straits Times
HSBC chair Mark Tucker to return to Asia insurer AIA after overseeing bank overhaul
HSBC chairman Mark Tucker will depart HSBC by Sept 30 and will step into the role of AIA chairman on Oct 1. PHOTO: REUTERS HONG KONG - HSBC Holdings' high-profile chairman Mark Tucker will return to the insurance sector as chair of Hong Kong-based AIA Group, after having presided over top management changes and navigated Sino-US tensions at the Asia-focused lender. Mr Tucker will depart HSBC by Sept 30 and will step into the role of AIA chairman on Oct 1, the two companies said in separate statements on June 6. Mr Tucker served as AIA chief executive and president between 2010 and 2017. Mr Brendan Nelson, a former KPMG partner and board member who is the chair of HSBC's group audit committee, would become interim chairman from Oct 1, as the bank continues with its search for a permanent replacement, it said. Mr Tucker's departure from HSBC, which generates the bulk of its revenues and profits in Asia, will cap an eventful eight-year tenure at the lender, during which he oversaw a sweeping restructuring and shrinking of the bank. Under Mr Tucker's stewardship, HSBC has had to deal with a constant drumbeat of geopolitical tensions, as Britain, together with the US, clashed with China, where the bank has its second home and major profit engine in the financial hub of Hong Kong. Those experiences, as well as his deep Asia and insurance sector expertise, will stand him in good stead in the new role at AIA, as the pan-Asian insurer looks to bolster market share in the key markets of mainland China and Hong Kong. Mr Tucker will replace Mr Edmund Sze-Wing Tse as AIA's chairman. Shares in AIA were up 1.8 per cent, while Hong Kong shares of HSBC were down 0.3 per cent. Hong Kong's benchmark index was off 0.2 per cent. Besides mainland China and Hong Kong, AIA's 18 markets in Asia include Thailand, Singapore, Malaysia, Australia, Indonesia, New Zealand, the Philippines and South Korea. It also has a joint venture in India. A one-time professional soccer player, Mr Tucker, who took AIA public shortly after his appointment in 2010, has previously held several leadership jobs in the insurance sector, including at Britain's Prudential. His departure from HSBC was not a surprise. He was nearing the end of the nine-year maximum advised for chair roles under Britain's corporate governance code, and the bank announced on May 1 that he would step down before the end of the year. Since joining HSBC in 2017, becoming the bank's first-ever externally recruited chairman, British-born Tucker worked with four different CEOs, and he was involved in the selection of three of them. Mr Tucker was seen by investors, analysts and insiders as a key person at the bank to help it navigate geopolitical tensions and expand its business in China as part of its Asia pivot to boost growth. Geopolitical tensions came to a head for HSBC in May 2023 when its then-biggest shareholder, Ping An Insurance of China, lobbied for the bank to spin off its Asian business, a proposal ultimately defeated at HSBC's annual shareholder meeting. HSBC's senior independent director Ann Godbehere said the selection process to appoint a permanent chairman was underway. Mr Tucker will serve as a strategic adviser to CEO Georges Elhedery and the board while the recruitment search remains in place. 'Brendan's extensive experience on UK-listed boards, and as Group Audit Chair, makes him ideally placed to assume the role on an interim basis while the process continues,' Ms Godbehere said of Mr Nelson. He previously served as an independent non-executive director at several major UK-listed companies, including oil giant BP and financial services firm NatWest. HSBC is expected to search for Mr Tucker's successor from its current board, sources familiar with the bank's plans told Reuters. Among the leading candidates is former Citigroup President Jamie Forese, the sources said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
