汇丰银行全球奢侈品行业全球奢侈品负担得起的奢侈品便是便宜的2018774页

Disclaimer&Disclosures:ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit“affordableluxury”brandstothriveInreality,therearereasonswhyaffordableaccessoriesbrandsarelaggingingrowth(andvaluation)vshigher-endluxurypeersWeinitiatewithaBuyonMichaelKors(TPUSD88),andmaintainBuyratingsonTapestry(TPUSD63)andSMCP(TPEUR28.5).WemaintainaHoldratingonPandora(TPDKK500fromDKK590)EQUITIESGLOBALLUXURYGOODSJuly2018By:ErwanRambourg,AntoineBelge,Anne-LaureBismuth,AlexisCooper,andMurielleAndre-Pinard1EQUITIES●GLOBALLUXURYGOODSJuly2018Wewouldexpectaffordableluxurybrandstobenefitfromthegrowthofthemiddleclass,butthetheoryisnotentirelyborneoutinreality.Inaccessories,TapestryandKorslagtheirhigher-endEuropeanpeers,althoughwefindvaluationcompelling.Inreadytowear,weseegoodgrowthatSMCP,andinjewellery,Pandorastillfacessomechallenges.WeinitiateonMichaelKorsatBuy(TPUSD88)andmaintainBuyratingsonTapestry(TPUSD63)andSMCP(TPEUR28.5).WemaintainaHoldratingonPandora(TPDKK500fromDKK590).SometheoreticalkeycompetitiveadvantagesintheaffordableluxuryspaceTheUSandAsiaarekeymarketsforaffordableluxurybrands:theUSeconomyisdoingwell,withconsumptionhighdespitelowwagegrowth,andinChinathemiddleclasscontinuestogrowwithmorepeoplehavingboththecapacityandtheenthusiasmtospend,whichshouldimplystrongdemand.Also,theaffordableluxurybrandscandeliverdecentmarginswhilecharginglowerpricesthantheirhigher-endEuropeanpeers,thankstolowproductionandsourcingcosts.Inaddition,theyarepositionedtoreachintotheluxurywhitespaceasconsumerstradeup.Differentstoriesforaccessories,readytowearandjewelleryInspiteoftheseadvantages,theaffordableaccessoriesbrandswecoverarenotseeingboomingsales.Weexploreseveralreasonsforthis:thefactthatthebrandsarenottrulyglobalmayaffecttheirdesirabilityforconsumers;thesubstantialoutletpresenceinsomemarketscouldaffectbrandequity;somebrandslookover-distributed,especiallycomparedtotraditionalluxurypeers;andaffordableluxurybrandsjustdon’thavethesameaspirationalvalueofhigher-endEuropeanpeers.What’stheendgame?Withlimitedgrowthfornowintheaccessoriesspace,groupscanexpandbyacquiringsmaller,growthcompanies,whichalsodiversifiestheportfolioandshoulddiminishsomeofthefashionriskthatcomesfrombeingamono-brandcompany.WebelieveM&Amakessenseforthesoftluxurycompanieswecover(aswearguedinourinourthematicreport,WelcometotheFamily,2October2017),butnotsomuchforPandora,which,inourviewhasquitealottofixbeforethinkingaboutmergingoracquiringanothercompany.TapestryisalreadyaheadofthecurvewithM&A,andKorswilllikelycontinuetobeanaggregator.Meanwhile,SMCPhaspotentialtogrowinitsspacebothorganicallyandthroughM&A.Whatstocksdoweprefer?Inaffordableluxury,weinitiatecoverageonMichaelKorsatBuy(TPUSD88)andmaintainBuyratingsonTapestry(Buy,TPUSD63)andSMCP(Buy,EUR28.5).WemaintainourHoldratingonPandora(TPDKK500fromDKK590).ExecutiveSummaryEQUITIES●GLOBALLUXURYGOODSJuly20182ExecutiveSummary1Affordableluxuryischeap3Companyprofiles15Accessories(listed)17MichaelKors(KORSUS)18Tapestry(TPRUS)36Accessories(private)43Furla(notlisted)44Longchamp(notlisted)46ToryBurch(notlisted)48Jewellery51PandoraPNDORADC)52Readytowear59SMCP(SMCPFP)60Disclosureappendix68Disclaimer72Contents3EQUITIES●GLOBALLUXURYGOODSJuly2018Intheory,withtheUSeconomyrecoveringandtheChinesemiddleclassflourishing,affordableluxuryshouldbeseeingverystronggrowthrightnowasconsumersareableto‘indulge’andworktheirwayuptheluxurypyramid(seepage6).Inreality,affordableluxurycompaniesarelaggingbehindtheirhigher-endluxurypeersbothingrowthandvaluation,whichseemscounter-intuitive.Thisisespeciallytrueofleathergoodsandaccessories(Tapestry,Kors)andjewellery(Pandora),butnotsomuchofreadytowear(SMCP).OpportunitycomesknockingWeareseeingthreethemesthathighlightthepotentialfortheaffordableluxurysegment:strongdemandinkeymarketssuchastheUSandChina;thenewmarketopportunitybetweenaffordableluxuryandtraditionalluxurymeansthatthereisstillsignificantuntappedpotentialinthewhitespaceabovetheaffordableluxurybrandsandthefactthataffordableluxurycompaniessourcefromlowcostcountries.Allofthesefactorstogethershould,intheory,createaprofitableopportunityforbrandstobesuccessfulhere.TheUSisrecovering…Thedecadebetween2000and2010sawtheriseofthemassaffluent,withmorepeoplebecomingwealthierandgivingthemiddleclassmoremoneytospend.Indeed,analysisbythePewResearchCentersuggeststhatrelativetocountriesinWesternEurope,middleclass’incomeintheUSishigher,makingitoneofthewealthiestmiddleclassesintheworldandwithsignificantspendingpower(PewResearch,5June2017).AffordableluxuryischeapIntheory,demandfromChineseandAmericanmiddle-classconsumersshouldenable“affordableluxury”brandstothriveInreality,therearereasonswhyaffordableaccessoriesbrandsarelaggingingrowth(andvaluation)vshigherendluxurypeersWeinitiatewithaBuyonMichaelKors(TPUSD88)andmaintainBuyra