But as LVMH grew in China – there are currently about 38 Louis Vuitton stores there, including in remote areas such as the southern Guangxi autonomous region, compared to the 57 or so in Japan – it lost some of its cachet. “In China, Louis Vuitton is seen as the brand that even your ai-yi, or domestic helper, can afford,” said a retail consultant who declined to be named in order to be candid. When asked to comment, LVMH told Reuters via email it expected to “gain a brand new lead on the market” via a new store set to open next month in Shanghai’s swanky Plaza 66 mall. “The Plaza 66 will confirm Vuitton as the trendsetting brand in China,” the email said. Gucci did not immediately respond to requests for comment. LV remains one of China’s most popular labels – a recent survey by Digital Luxury Group put it at the top of web searches by consumers. But brands such as Chanel and Hermes are catching up fast. A recent study by consultants Bain shows twice as many Chinese now covet Hermes[RMS_FR Loading… () ], creators of the iconic Birkin and Kelly handbags, and the brand is the third most likely to be purchased after Gucci and Louis Vuitton. “Some prefer Hermes because our products are more subtle and not over exposed,” the brand’s China president, Leo Liu, told Reuters in an emailed statement. Some Like It Haute For Gao Jie, 27, a public relations employee who routinely buys luxury goods, Hermes is the ultimate status symbol: their bags are handmade, come in limited quantities, cost anything between $ 9,000 to $150,000 and are generally not within the reach of the general public. Gao says this year she aims to buy a brightly colored Kelly Candy handbag that costs at least four times her monthly salary of 20,000 yuan ($ 3,100). “There are some things that are classic by design and widely recognized by the market. I really hope to one day be able to own all these classic designs,” said Gao, who regularly sets aside some of her salary, and income from investing in stocks, to buy shoes and bags. To attract shoppers like Gao, LVMH and other larger luxury brands are trying to strike the difficult balance between exclusivity and popularity to remain profitable. LVMH is offering customers increasingly expensive and bespoke services to try to retain a mystique around the Louis Vuitton brand, whose creations are seen as being both too common and easily copied. The company is also careful about rolling out new stores, aware that the brand would suffer from too much visibility. Whether these strategies will convince savvy Chinese shoppers like Daisy Liu to carry their LV bags is unclear. “Luxury, embedded in that, is this notion of exclusivity: that not everybody has it. It’s always a fine line that the brands need to tread,” said Torsten Stocker, partner at business strategists
Call it the Concourse L’Argent. The annual series of car auctions known as the Pebble Beach Concourse d’Elegance, held as always on the famous golf course in Monterey, Calif., shattered its own total sales record this weekend. The five biggest auctions racked up a sales total of $260.3 million, up from last year’s $197.5 million, according to Hagerty, the collectible-car insurance company and price tracker. The sales jump came despite the fact that fewer cars were auctioned off this year. Last year, 882 lots were sold, for an average sale price of $ 223,950. This year, 754 lots sold for an average sales price of $345,272. That means the average sales price jumped more than 50 percent. The numbers could go even higher later today or tomorrow, since the early results don’t include post-auction sales of cars that didn’t go at the auction. Pebble Beach Collectible Car Sale The overall numbers weren’t the biggest surprise of the weekend. A 1936 Mercedes 540K Special Roadster (see my “test drive ” here) topped the price list as expected, but it didn’t break the $15 million mark that collectors anticipated. Meanwhile, a 1960 Ferrari nearly staged an upset, coming in a close second place at $11.2 million. Here are the top 10 sellers for the auctions run by Gooding, RM, Mecum, Bonhams, Russo and Steele. 1. 1936 Mercedes-Benz 540K Special Roadster sold for $11,770,000 (Gooding) 2. 1960 Ferrari 250 GT California LWB Competizione Spyder sold for $11,275,000 (Gooding) 3. 1968 Ford GT40 Gulf/Mirage Coupe sold for $11,000,000 (RM) 4. 1957 Ferrari 250 California GT SWB Spyder sold for $8,580,000 (RM) 5. 1955 Ferrari 410 S Berlinetta sold for $ 8,250,000 (RM) 6. 1956 Ferrari 250 GT TdF Coupe sold for $ 6,710,000 (RM) 7. 1957 Ferrari 250 GT California LWB Prototype Spyder sold for $6,600,000 (Gooding) 8. 1955 Ferrari 857 Sport sold for $6,270,000 (Gooding) 9. 1928 Bentley Le Mans 4 1/2 Liter sold for $ 6,050,000 (Gooding) 10. 1972 Porsche 917/10 Spyder sold for $ 5,830,000 (Mecum)
A luxury marketer once told me that wealthy consumers will never buy anything online – sight unseen – for more than $10,000. We may have to change that price to $50,000. Christie’s sold $819,715 worth of wine during an online-only auction. Among the big sellers was a case of 1982 Château Lafite-Rothschild, which sold to an Asian collector for $42,350. Christie’s and other auction houses have long used the Internet to sell some products and to market for live auctions. But during the two-week timed wine auction, all browsing and bidding was done completely online. Its success could mean that online-only auctions are the wave of the future. (Read more: The ‘Fairy Tales’ of Art, Wine and Jewels) Robert Frank CNBC Reporter & Editor Christie’s tested its online-only model with The Collection of Elizabeth Taylor late last year and a Spring charity auction of Hermes handbags. With the wine sale, the company says it will expand the program. Steven P. Murphy, CEO of Christie’s, said that more than 25 percent of the registered buyers for the sale were new to Christie’s. “E-commerce is a key part of our growth strategy as a company, and we look forward to expanding this exciting new model even further this fall, as we add more collecting categories to our online- only auction calendar.” The question is how far online-only auctions can go. Will people buy $120 million Munch paintings online? If online auctions go the way of the stock exchange, will the glamorous evening entertainments we’re used to, featuring staggering amounts of spending, become boring bytes on a screen? Neither is likely. Live auctions will no doubt continue to be the preferred mode of selling blue- chip art or major works priced above $1 million. It will also likely remain the primary way of selling super high-end wine, jewelery and other collectibles. (Read more: Diamonds Are the New Stocks ) But for some lesser priced items and objects that don’t need to be perused much in person, online bidding provides the wealthy a welcome convenience. It may not be long before people can sit at home in their bathrobes and click to buy a Picasso – or at least, a Picasso drawing.
Lawyers for Asia’s richest woman and three of her children held preliminary arguments on Wednesday over who should control a $4 billion trust, a bitter family feud that has captivated Australia. Justice Paul Brereton of the New South Wales Supreme Court reserved a decision on whether the case against mining magnate Gina Rinehart should be thrown out of court or argued fully. A decision is not expected for some days. At stake is Rinehart’s position as the sole trustee of the trust that holds a near-one-quarter share in Hancock Prospecting, one of the world’s largest privately-owned mining companies. Lawyers for Rinehart and her daughter Ginia Rinehart, the only child to side with her mother in the feud, sought to have the suit brought by the three elder children to remove their mother as a trustee thrown out of court. Hancock Prospecting is developing what would be Australia’s fourth-largest iron ore mine and generates hundreds of millions of dollars a year in royalties from tenements secured by Gina Rinehart’s father, Lang Hancock, a legendary figure in Australian mining history. (Read more: ‘Drink Less, Work More,’ Rinehart Tells Non- Rich) The dispute has already caused a delay at Hancock’s flagship Roy Hill iron ore mine, rail and port project in Western Australia, which is now running into some stiff headwinds from slowing China demand and soaring costs. RELATED LINKS France’s Richest Man Told ‘Get Lost’ Wealthy Work to Avoid Health-Care Law’s ‘Mini-Cliff’ The Ultra-Rich Are Ready to Go Back to Stocks A halving in iron ore prices over the past year has dented both investor appetite for such projects and the 58-year-old widow’s fortune, estimated by Forbes in February at around $18 billion. FAMILY TIES Rinehart has been putting some of her vast wealth to work with purchases of media companies Fairfax Media and Ten Network Holdings in the past year, causing some consternation among the chattering classes. Her opposition to taxes and calls for miners to be allowed exemptions from laws restricting the use of foreign labour have also put her on a collision course with government and unions. Recently, Rinehart warned Australia was becoming too expensive for mining firms which she said could hire workers for under $2 a day in Africa. Rinehart, known as the Pilbara Princess, has a long history of controversy and has played out much of her life in the media spotlight. She is the only child of Hancock, a larger-than-life character credited with discovering the world’s largest deposit of iron ore in Pilbara, Western Australia. Rinehart learned the business at her father’s knee and, after a prolonged battle with his third wife following Hancock’s death in 1992, cemented control of Hancock Prospecting. Rinehart owns three-quarters of Hancock Prospecting and is the sole trustee of the family trust which holds a further 23 percent of the company for the benefit of her four children.Last year, just days before the trust was due to vest, Rinehart changed the vesting date to 2068 and sought changes in the trust documents, prompting her three eldest children — Hope Rinehart Welker, Bianca Rinehart and John Hancock — to fight to have her removed as trustee. E-mails earlier made public after Rinehart’s efforts to keep the case behind closed doors showed Rinehart told the children the vesting of the trust would likely trigger crippling capital gains tax liabilities for them. She also described the elder trio of children as being lazy and spoilt, and warned that their security would be at risk if they persisted with the action. MEDIATION ATTEMPT Lawyers for Rinehart, who was not in court, said she had since brought forward the vesting date for the trust and was prepared to hand over the assets, something the children did not want. “The only remaining duty for the trustee is to divide the assets and hand it out,” David Russell, counsel for the mining magnate said in court. “The beneficiaries will not want to receive the shares for tax reasons. The offer is made in open court.” Earlier, an attempt by the youngest daughter, Ginia, to bring about a mediation was rejected by the justice and lawyer for the warring children. “Ginia had a most genuine interest in moving the case to mediation without further public ventilation of this very unhappy family dispute,” Ginia’s lawyer, Francois Kunc, said. The early skirmishes in the family feud delayed the sale of equity stakes in Roy Hill, Rinehart has previously said. South Korean steel giant POSCO, Japanese trading company Marubeni, South Korea’s STX Corp, and Taiwan’s China Steel Corp hold a collective 30 percent stake in the project, with Hancock Prospecting holding the remainder. Hancock is currently trying to raise about $7 billion in debt funding to get the massive project into production. It is not clear what impact, if any, the removal of Rinehart as trustee of the family trust would have on Hancock Prospecting and its iron ore, coal and media empire. Shares in the company can only be held by Rinehart and her direct descendants and cannot be pledged as collateral.