Louis Vuitton Hermes Audemars Prada Buccellati Chaumet Dior Showdown for Real Estate
Luxury giants fold their muscle to lock down high window space
PARIS, March twenty (Reuters) - French luxury group of people LVMH
is trying to push out additional rivals from plush Place
Vendome in Paris after buying one from the highest-profile
buildings, illustrating the modern battle for Europe's
Cash-rich peoples such as LVMH, Richemont and Hermes
have been stepping up property investment on key
fashion capitals, buying extensive buildings to lock in premium
portals for which prices and rents are really rising fast.
LVMH, owner concerning jewellers Fred and Chaumet in addition to fashion label
Louis Vuitton, had third. 2 billion euros ($4. forty six billion) of cash on
its a "balance sheet" at the end of last year and Cartier individual
Richemont had 2 . 4 billion dollars euros of disposable cash available on March 31.
In the face of that delete word firepower, prime window space on
the likes of Paris, London and Miami could be pushed beyond the
methods of smaller brands such as Buccellati, typically family-run
Italian jeweller favoured by using aristocrats and Hollywood stars.
Buccellati says it has been asked by LVMH to vacate No . 4
Add Vendome by the end of June, many years before the end of
"This is regarded as our most important shop window, in said Buccellati
Chief Executive Thierry Andretta, adding that it had been
renting home, one of the most visible on the elegant
"We will fight to stay, " this individual said, adding that lawyers received
LVMH acquired the building for more than 250 million euros
in 2011, based on current market place estimates, and says it is weight training
its right to give notice if there is to refurbish the property.
"LVMH which has until May to ask for a materials permit, " a company
The group offers removed a small fashion boutique in addition to
antique jewellery shop from the constructing in the past year and
has also convinced Italian jeweller Damiani to set when
"LVMH is asking our business to leave, but we would like keep as
this shop is very preparing for us in terms of image and product, "
said Mario Gilardini, Damiani's head of worldwide sales.
Damiani, Buccellati, Richard Mille and other professional tenants have
already lost a degree of name visibility on Place Vendome,
its signage eclipsed by the huge classified ads for J'adore
perfume - of LVMH's Dior - now printed across the
It is difficult to quantify back on such properties
because the investing are also aimed at preserving and
growing a luxury brand's image, but they call and make an undeniably
LVMH does not release results for individual outlets, but
Exane BNP Paribas analyst Luca Solca offers that its Louis
Vuitton collect on the Champs Elysees has product in line with a
hypermarket, at 250-300 million euros a year, while a lot of
analysts say it could contribute 13-15 percent of the brand's
But product are only part of the equation. Real estate authorities
say that average rental values inside a likes of Place Vendome on
Paris, Bond Street and Knightsbridge in London and Via
Montenapoleone on Milan have doubled in one hundred years to between
12, thousand and 15, 000 euros in a square metre.
"Considering how much cash wide luxury groups have on their
a "balance sheet" and interest rates being so minimum, it makes sense
for them to buy key shops in established markets when
tailored opportunities arise, " said Fossiles harz luxury goods
LVMH, which at the same time spent about 300 million pounds of fat ($499
million) in 2012 to buy numerous properties in London's New Connection
Street, is by no means the big luxury group on the lookout
when it comes to property deals. Richemont spent $380 million in 2012 to buy
the Saint Regis hotel on New York's Fifth Avenue.
Both Richemont in addition to LVMH have created specialist business
parts to make high street acquisitions. LVMH become less common to comment
on its real-estate strategy, but a Richemont public spokesperson said that
the Swiss group doesn�t intend to ask the New York property's
Hermes, meanwhile, bought its Beverly Hills store for $75
hundred last year, having beaten Chanel toward a 75 million pound
deal on the New Bond Street store concerning British jeweller Asprey in
Truly Prada, which mostly leases his / her property, is getting in
on the behave, buying several buildings on Unwanted and old Bond Street for more
The smaller professionals are also in danger of being squeezed information about
of the leasehold market for high window space. Prada recently
retaliated off competition for stores on Geneva, Zurich and Milan by using
offering advance cash payments concerning 20 million euros or more,
in conformity with a real estate adviser with first-hand information about
"Prada is confusing the market with their big cheques, " the
This kind muscle-flexing has leaves smaller attractiveness brands
Longchamp, one of the fastest-growing The language handbag makers,
acknowledges that very best local good locations has become a challenge.
"Demand has become increasingly concentrated in certain significant
areas, which means that opportunities are a few. And when they
become available, they go towards highest bidder, " Chief
The main question for all involved is whether typically bull market
"There are indications of a bubble right now in the Foreign
market, " said Marc-Christian Riebe, chief executive of retail
"If typically Chinese stopped buying watches in addition to jewellery in
Paris and Lucerne, I think jewellers and watchmakers can be
(Additional reporting by Pascale Antlubis in Paris and Silke
Koltrowitz in Zurich; Editing by Feature John and David Goodman)
