Michael Tonello's Blog, page 28
March 20, 2014
Hermes Chief Picks Up $4.9M BPC Penthouse From Record Label Honcho
Music executive Sylvia Rhone has sold her Battery Park City penthouse duplex for more than $4.9 million to Robert Chavez, the CEO of luxury clothier Hermes USA, according to city records filed today.Rhone, who is known as the first black woman to head up a major record label, first listed the three-bedroom at the Liberty House condominium tower this past October with Ivy Spitzer and Elizabeth Unger, both of the Corcoran Group.
Rhone recently left her post as the president of Motown Records, a division of Universal Music Group, to start her own record label with Epic Records, according to news reports. She has worked such artists as Stevie Wonder and Nicki Minaj.
Her former apartment, crafted by interior design firm Clodagh Design, boasts a 34-foot corner living room and a kitchen pantry with a wet bar and wine cooler, according to the listing. It also comes with four terraces (which are, appropriately, all wired into the apartment’s sound system), including one with a custom Viking grill, dining table, chaise lounges and a cedar storage closet, the listing says.
Rhone’s initial ask was almost $5.8 million, but after two price cuts the final asking price was just under $5.1 million, according to Streeteasy.com. It was not immediately clear how much she paid for the apartment.
Chavez signed the contract in May, and the deal closed Aug. 1, records show.
The 240-unit condo tower at 377 Rector Place dates back to 1986 and was developed by the Milstein Organization.
Neither Spitzer nor Unger immediately returned requests for comment. Chavez could not immediately be reached.
http://therealdeal.com/blog/2012/08/2...
Hermes Hikes Dividend After New Record-High Profit Margin
(Reuters) - France's Hermes (HRMS.PA) hiked its dividend on Thursday after the maker of Birkin handbags and printed silk scarves posted a new rise in profits and record-high operating margin last year.While a crackdown on corruption in China has dented the sales of other luxury goods such as LVMH's (LVMH.PA) Louis Vuitton and Kering's (PRTP.PA) Gucci products, Hermes has posted resilient growth.
Hermes said in a statement that 2013 operating profit rose 8.9 percent to 1.218 billion euros, while its operating margin reached a new all-time high of 32.4 percent of sales, compared to 32.1 percent in 2012.
Last month, Hermes posted 2013 sales of 3.75 billion euros, up 13 percent at constant exchange rates, outperforming rivals such as LVMH, whose organic fashion and leather sales rose 5 percent during the same period.
Full-year sales rose 16 percent in Asian markets excluding Japan, 14 percent in the Americas and 12 percent in Europe.
Net profit rose 6.8 percent to 790 million euros and the company said it planned to pay a dividend of 2.70 euros a share for 2013, from 2.50 euros for 2012.
Hermes is known for its iconic Kelly and Birkin leather handbags, which cost between 7,000 and 30,000 euros and can take months to obtain in certain colours or types of leather, creating scarcity and a reputation for exclusivity.
Shares in Hermes closed at 237.5 euros on Wednesday and are down 9.9 percent so far this year.
Hermes commands one of the highest ratings among European luxury stocks due to the brand's resilience to swings in demand and expectations that LVMH, its largest external shareholder with a 23.1 percent stake, could make a takeover bid.
(Reporting by Natalie Huet; editing by Mark John)
March 19, 2014
Louis Vuitton Hermes Cartier Prada Buccellati Chaumet Dior Battle for Real Estate
Luxury giants flex their muscle to lock down prime window space
By Astrid Wendlandt
PARIS, March 19 (Reuters) - French luxury group LVMH is trying to push out smaller rivals from plush Place Vendome in Paris after buying one of its highest-profile buildings, illustrating the intensifying battle for Europe's prime retail locations.
Cash-rich groups such as LVMH, Richemont and Hermes have been stepping up property investment in key fashion capitals, buying entire buildings to lock in premium sites for which prices and rents are rising fast.
LVMH, owner of jewellers Fred and Chaumet and fashion label Louis Vuitton, had 3.2 billion euros ($4.46 billion) of cash on its balance sheet at the end of last year and Cartier owner Richemont had 2.4 billion euros of disposable cash at March 31.
In the face of that kind of firepower, prime window space in the likes of Paris, London and Milan could be pushed beyond the means of smaller brands such as Buccellati, the family-run Italian jeweller favoured by aristocrats and Hollywood stars.
Buccellati says it has been asked by LVMH to vacate No.4 Place Vendome by the end of June, three years before the end of its lease.
"This is our most important shop window," said Buccellati Chief Executive Thierry Andretta, adding that it had been renting the building, one of the most visible on the elegant 18th-century square, since 1979.
"We will fight to stay," he said, adding that lawyers had been retained.
LVMH acquired the building for more than 200 million euros in 2011, based on market estimates, and says it is exercising its right to give notice if it is to refurbish the property. "LVMH has until May to ask for a construction permit," a company spokeswoman said.
The group has already removed a small fashion boutique and antique jewellery shop from the building in the past year and has also asked Italian jeweller Damiani to leave when its lease runs out in 2016.
"LVMH is asking us to leave, but we would like to stay as this shop is very strategic for us in terms of image and sales," said Mario Gilardini, Damiani's head of worldwide sales.
RIVALS ECLIPSED
Damiani, Buccellati, Richard Mille and other tenants have already lost a degree of brand visibility on Place Vendome, their signage eclipsed by the huge advertisement for J'adore perfume - made by LVMH's Dior - now emblazoned across the building's scaffolding.
It is difficult to quantify returns on such properties because the investments are also aimed at preserving and nurturing a luxury brand's image, but they make an undeniably significant contribution to overall sales.
LVMH does not release figures for individual outlets, but Exane BNP Paribas analyst Luca Solca estimates that its Louis Vuitton store on the Champs Elysees has sales in line with a hypermarket, at 250-300 million euros a year, while other analysts say it could contribute 13-15 percent of the brand's total sales in France.
But sales are only part of the equation. Real estate experts say that average rental values in the likes of Place Vendome in Paris, Bond Street and Knightsbridge in London and Via Montenapoleone in Milan have doubled in five years to between 12,000 and 15,000 euros per square metre.
"Considering how much cash big luxury groups have on their balance sheet and interest rates being so low, it makes sense for them to buy key locations in established markets when specific opportunities arise," said Bernstein luxury goods analyst Mario Ortelli.
LVMH, which also spent about 300 million pounds ($499 million) in 2012 to buy several properties in London's New Bond Street, is by no means the only big luxury group on the lookout for property deals. Richemont spent $380 million in 2012 to buy the St Regis hotel on New York's Fifth Avenue.
Both Richemont and LVMH have created specialist business units to make high street acquisitions. LVMH declined to comment on its real-estate strategy, but a Richemont spokesman said that the Swiss group does not intend to ask the New York property's existing tenants to leave.
Hermes, meanwhile, bought its Beverly Hills store for $75 million last year, having beaten Chanel to a 75 million pound deal for the New Bond Street store of British jeweller Asprey in 2009.
BUBBLE BREWING?
Even Prada, which mostly leases its property, is getting in on the act, buying several buildings on Old Bond Street for more than 130 million pounds last year.
The smaller players are also in danger of being squeezed out of the leasehold market for prime window space. Prada recently fought off competition for stores in Geneva, Zurich and Milan by offering advance cash payments of 20 million euros or more, according to a real estate adviser with first-hand knowledge of the matter.
"Prada is confusing the market with its big cheques," the adviser told Reuters.
Such muscle-flexing has leaves smaller luxury brands struggling to secure suitably prestigious premises.
Longchamp, one of the fastest-growing French handbag makers, acknowledges that finding good locations has become a challenge.
"Demand has become increasingly concentrated in certain key areas, which means that opportunities are rare. And when they become available, they go to the highest bidder," Chief Executive Jean Cassegrain said.
The big question for all involved is whether the bull market for prime retail locations could overheat.
"There are signs of a bubble right now in the European market," said Marc-Christian Riebe, chief executive of retail property consultant The Location Group.
"If the Chinese stopped buying watches and jewellery in Paris and Lucerne, I think jewellers and watchmakers would have to renegotiate their lease contracts." ($1 = 0.7180 Euros) ($1 = 0.6008 British Pounds)
(Additional reporting by Pascale Denis in Paris and Silke Koltrowitz in Zurich; Editing by Mark John and David Goodman)
Christie's Luxury Handbags and Accessories Sale - Online Auction
Christie’s is launching a season of vintage couture, handbags and accessory sales with this online-only auction of luxury handbags and accessories, which opens for bidding on 18 March. The sale features a wide array of vintage handbags in bright and vibrant colours, with over 125 lots by sought-after designers including Hermès, Chanel, and Christian Dior. Highlights include iconic Hermès Birkins and Kellys in bright spring colours and exotic leathers. These are the lots to watch:
Most interesting provenance? Lot 85. The set was created by Louis Vuitton in 2007 in honour of pétanque’s 100th anniversary. The sets, produced in limited numbers are light and portable, allowing play in areas where steel boules many not be permitted. They were produced in limited numbers and were originally given to Louis Vuitton’s top clients as gifts.
Estimate: £2,000-3,000
Lot 82 is another interesting piece. It was created for a Hermès exhibition in Japan in 1997 and the bags were given to VIP guests. The French slogan translates as "A Trip to Wonderland".
Estimate: £700-1,000
Top lot: One of the exotic skin bags is likely to fetch the most. My favourite is the amethyst crocodile Birkin bag, Lot 67. The colour is stunning – subtle and jewel like.
Most unusual item: Probably Lot 38, the Hermès Sac à Malice. It was made in 1988 and is a rather unusual design, which we haven’t sold previously at Christie’s. It is such a fun bag and perfect for summer with its beach theme. We have also have a selection of unusual coloured Kelly bags in the sale. Lot 47 for example, a Menthe leather Kelly bag.
Estimate: Lot 38 £600-1,000 and Lot 47 £4,500-5,500
The dark horse: That might be Lot 120, a 1960s black crocodile Kelly bag. It's in such great condition with lots of "vintage" character.
Estimate: £3,000-5,000
The curator's pick: Lot 69 – a limited edition fuchsia pink Chanel Ladybug Charm Classic Flap bag from 2003-04, it’s not only unusual, but is a great colour and would be a brilliant addition to a collector’s wardrobe.
Estimate: £2,000-4,000
Online bidding runs from the 18-27 March.
Christie'swww.christies.com
March 18, 2014
Something Very Special: Terre D'Hermes Eau Très Fraiche
Something very special and actually quite new. Explodes with Orange and Citrus. Settles down, after some time, into something Earthy and Aromatic.
Coming this month, from Hermès.
Rest in Peace L'Wren Scott January 1, 1967 - March 17, 2014
Miss Scott was uber-chic. Shown above exiting the Carlyle Hotel in New York City carrying an Hermès Birkin handbag.
March 16, 2014
Jane Birkin Style Icon
How many people can say that they have the most coveted Hermes bag in the world named after them? Jane Birkin became a symbol of the Swinging Sixties and after accidentally spilling the contents of her straw bag next to Hermes CEO Jean-Louis Dumas on a flight from Paris to London, she also became his muse for a new design. The Birkin bag is now brandished by the most famous and most wealthy, although Birkin herself no longer uses her since developing tendonitis. With a wardrobe full of mini dresses and Mary Janes, Jane Birkin was the original boho babe, paving the way for Rachel Zoe and her hoard of hippies.-by Sophie Miskiw
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