Business as usual
British Airways has launched a new, exclusively business-class service from London City Airport to New York’s JFK. The twice-daily service will use Airbus A318 aircraft and is the first British Airways route to allow customers to send emails and texts and use the internet, via an inflight communications system. Willie Walsh, CEO, explained, “Our long tradition of delivering innovative service continues with the launch of this unique route. For the first time, the City has a tailor-made premium service to New York on its doorstep offering the most productive use of time for business people travelling between two great financial districts. New York is the most demanded destination that is not currently served from London City. The new route is a key growth opportunity for us and demonstrates the premium nature of London City Airport.” Other benefits include the option of checking in just 15 minutes before the flight takes off, and passing through US customs in the same way as a domestic arrival, having cleared immigration during a brief stop at Shannon Airport in Ireland. Food on the flight has been developed with critically-acclaimed Roast restaurant located at Borough Market in London.
Jimmy Choo has signed a new fragrance deal with Inter Parfums. The 12-year partnership will officially begin at the start of 2010 and will see the creation, development and distribution of Jimmy Choo fragrances by the Paris-based perfumer. Jimmy Choo has previously been involved in a fragrance agreement with Selective Beauty, but no Jimmy Choo perfume was ever produced. Tamara Mellon, Founder and President, said, “It has always been my vision to accessorise the woman, and fragrance is an integral part of that modern wardrobe. Through the association with Inter Parfums I look forward to bringing this important aspect of my vision to life.” Inter Parfums works with other luxury brands including Burberry, Lanvin, Paul Smith and ST Dupont.
The number of Chinese travelling is growing
The Chinese Ministry of Commerce reported that 228 million Chinese left home during the first week of October – a national holiday marking the 60th anniversary of the People’s Republic – marking a 28.5% increase year-on-year. During this time $14.75bn was spent on travel, up 26.5%. Beijing was reported as being the top destination, with 15 million visitors, a 59% year-on-year increase followed by Shanghai, Hanzhou and Chengdu. During the period nearly 600,000 visited Hong Kong and 420,000 went to Macau.
The TAG luxury stock index
Year-to-date (as of 16/10/09), the TAG Luxury Stock Index is up 50.1%, outperforming the major market indices (year-to-date, the S&P 500, France CAC 40, FTSE 100 and Japan Nikkei 225 were up 20.4%, 18.9%, 17.1% and 15.8%, respectively).
Over the last month (since 16/9/09), luxury stocks have continued to outpace the broader market: the TAG Luxury Index increased 4.5%, higher than the major global stock indices, which rose, on average, 1.2%. The biggest gains were registered at Burberry (+16.5%), Swatch Group (+11.3%), and Tiffany (+8.5%), while Escada (-17.9%) and Hermès (-2.2%) witnessed the only declines during the month.
So far in 3Q09, we have started to see confirmation of an improvement in topline trends vs 2Q09 from a wide sample of our luxury names. Burberry reported a 2Q10 (CY3Q09) constant-currency sales decline of (5%) vs 8% last year, reflecting a sequential improvement at both its retail and wholesale divisions. Meanwhile, LVMH’s Fendi brand reported an uptick in US sales in early September and noted that August was better than July. Additionally, Tod’s indicated that September sales grew in the singledigits vs (1.5%) in 2Q09, while Bulgari noted that 2H09-to-date sales have improved significantly from (28.9%) in 1H09 at both retail and wholesale. These data points give us increased confidence in our outlook for a sequential uptick in sales as most of our luxury names lap significantly easier comparisons in the back half of the year (especially in 4Q09).