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| Ashley Hughes stands before the gardens of Newton Vineyards in Napa Valley. A lady always brings a scarf to wrap around her shoulders as temperatures can dip in the valley. |
I have always had a special place in my heart for
luxury goods. Ever since I spent the afternoon at Moet Hennessy Louis
Vuitton's (LVMH) vineyard Newton
in California, I kept a close eye on their business and acquisitions. I was
saddened when they engulfed one of my favourite brands Bvlgari,
for 3.7 billion euros ($5.2 billion) in March of
2011, but I know Bvlgari is in good hands. After all, 2 members of the Bvlgari
family now get seats on the board of LVMH.
I am a cautious investor in luxury stocks overall, but I am keeping an
eye out on the Hermes / LVMH Moet Hennessy Louis Vuitton saga. LVMH's
22% stake in Hermes International could be priceless over the long
haul. The brand sets itself apart from the other leather luxury goods, there is
a genuine demand for their products and the luxury industry is basically in the
infancy of growth in places like China. Hermes and LVMH headlines have garnered
a lot of attention as a recruitment story, but Hermes's holding company capital
structure can assist the family and future generations and allow them to remain
independent, at least over the 15-20 year view.
