Core Viewpoint - LVMH has reaffirmed that it has never misappropriated shares belonging to Hermes heir Nicolas Puech while acquiring a stake in Hermes [1] Group 1 - LVMH's statement emphasizes its commitment to ethical practices in its investment strategies [1]

Core Viewpoint - Nicolas Puech, the 82-year-old heir of Hermès, has filed a civil lawsuit against LVMH and its chairman Bernard Arnault, claiming that they unlawfully took over his Hermès shares valued at over $10 billion [1][3]. Group 1: Lawsuit Details - Puech alleges that he lost all his Hermès shares due to deceit by his financial advisor Eric Freymond, who allegedly transferred the shares to LVMH without his knowledge [1][2]. - The lawsuit was submitted to the French court in May, with the first hearing scheduled for November 20 [1]. - Puech seeks to recover the value of 6 million Hermès shares, estimated at approximately €14 billion (about $16.26 billion) based on current prices [1]. Group 2: Background of the Dispute - The financial dispute between Puech and Freymond is considered one of the most convoluted criminal cases in France, with allegations of fraud leading to the transfer of shares to LVMH [3]. - LVMH has been increasing its stake in Hermès from 2001 to 2013, ultimately holding over 23% of the company, which led to a prolonged legal battle between the two companies [3]. - Puech claims he was unaware of the transfer of his shares to LVMH and the whereabouts of the proceeds from the sale [3]. Group 3: Current Situation - Following Freymond's sudden death in a car accident, which was ruled a suicide, Puech faces challenges in seeking compensation as he cannot pursue claims against Freymond's family due to legal restrictions [3][4]. - Puech's current financial situation is reportedly dire, as he is now forced to travel in economy class [4]. - The French prosecutor's office is conducting a criminal investigation into Puech's case against Freymond, but LVMH and Arnault have not been formally investigated [4].

Core Insights - Hermes has successfully utilized its rich craft-based heritage to establish a leading position in the luxury market, characterized by carefully crafted scarcity, strong brand identity, and a significant international presence [1] Group 1: Company Overview - Hermes is recognized for its unique luxury business model that combines craftsmanship with brand strength [1] - The company's strategic focus on scarcity has contributed to its market differentiation and appeal [1] Group 2: Market Position - Hermes is positioned as one of the most prominent luxury brands globally, leveraging its heritage and international reach [1]

Group 1 - The article discusses the importance of fundamental analysis in evaluating company performance rather than relying on technical indicators like price charts [1] - The author emphasizes a long-term investment strategy, focusing on stocks and ETFs, particularly in US companies, while also analyzing European and Chinese firms [1] - The author identifies a contrarian investment approach, suggesting a willingness to go against prevailing market trends [1] Group 2 - The article does not provide any specific financial data or performance metrics related to companies or industries [2][3]

Core Viewpoint - The fashion industry is increasingly venturing into the beauty sector as a response to declining sales, with several major brands launching beauty products to explore new growth opportunities [3][10][46]. Group 1: Fashion Brands Entering Beauty - In September 2025, major fashion brands like Gap, Zara, and H&M announced significant moves into the beauty industry, indicating a trend among fashion companies to diversify their product offerings [5][16]. - Gap Group plans to launch beauty products in 150 Old Navy stores, with some featuring beauty consultants, aiming to leverage its financial stability for growth [12][10]. - Zara has introduced its first hair care line, including shampoo and conditioner, marking its entry into the hair care segment after previously launching cosmetics and fragrances [15][14]. Group 2: Performance of Fashion Brands - Gap Group reported a 4.85% increase in net sales for Q2 2024, ending a three-year decline, but the growth rate has slowed significantly compared to previous years [7][10]. - Zara's parent company, Inditex, experienced a modest 1.6% sales growth in H1 2025, with Zara itself showing the slowest growth in five years at 0.9% [13][14]. - H&M's net sales fell by 1.87% in the same period, with a notable decline in net profit, indicating a downward trend for the brand [16][17]. Group 3: LVMH's Beauty Strategy - LVMH launched its own beauty brand in 2025, with a focus on luxury makeup products, including 55 lipstick shades, aiming to enhance its beauty segment's profitability [32][33]. - Despite the launch, LVMH's overall sales and profits saw significant declines in H1 2025, with a 4.48% drop in net sales and a 21.59% decrease in net profit [34][35]. - The beauty segment's operating profit margin remains lower than the group's average, highlighting challenges in achieving profitability through self-created beauty brands [39][40]. Group 4: Designer Brands and Fragrance - Designer brands are increasingly entering the fragrance market, with several launching new perfume lines in collaboration with established fragrance companies [20][22]. - The trend reflects a broader strategy among fashion brands to transform into lifestyle brands, leveraging their design expertise while outsourcing production and distribution to fragrance giants [22][24]. - Notably, Christian Louboutin's fragrance line, managed by Puig, has faced challenges, with its makeup segment experiencing a decline in sales [30][28]. Group 5: Market Outlook and Challenges - The collective move into beauty by fashion brands raises questions about the sustainability of this strategy amid economic downturns [46]. - The beauty market's appeal remains strong, but the success of these ventures will depend on the brands' ability to adapt and innovate in a competitive landscape [46].

Market Overview - French stocks are experiencing weakness due to concerns about the Federal Reserve's rate cuts and high equity valuations as noted by Fed Chair Jerome Powell [1] - The benchmark CAC 40 index is down 20.34 points or 0.26% at 7,851.68 [2] Company Performance - Stellantis is the biggest loser in the CAC 40 index, down 3.4% [2] - Hermes International has decreased nearly 2%, while Renault, EssilorLuxottica, Capgemini, L'Oreal, Euronext, Publicis Groupe, and Saint Gobain are down between 1% to 1.7% [2] - LVMH and Pernod Ricard are both down nearly 1% [3] - Atos SE shares have increased by 4.7% after securing a major cybersecurity contract from the European Commission [3] - Carrefour is gaining approximately 2.3%, while Thales, Bouygues, Kering, and Legrand are up between 1.3% to 1.6% [3]

Core Insights - The article emphasizes the importance of compounding happiness, wisdom, and wealth as a lifelong pursuit for individuals in the financial markets [1] Group 1 - The individual expresses a strong passion for financial markets and behavioral economics, indicating a focus on understanding market dynamics and investor behavior [1] - There is a notable interest in researching investment ideas from renowned investors such as Warren Buffett and Charlie Munger, suggesting a strategy of learning from successful role models [1]

Core Viewpoint - LVMH has faced unexpected setbacks in its acquisition attempts within the luxury goods sector, particularly in its battles for Gucci and Hermès, highlighting the intense competition in the luxury market [1] Group 1: Acquisition Challenges - LVMH's attempts to acquire Gucci and Hermès have not been successful, marking significant challenges in its expansion strategy [1] - The luxury goods sector is characterized by fierce competition, with major players like LVMH vying for dominance [1] Group 2: Market Dynamics - The luxury market is described as a thrilling game of predator and prey, indicating the high stakes involved in acquisitions [1] - The ongoing rivalry among luxury brands suggests a complex landscape where strategic moves can lead to significant shifts in market power [1]

Core Viewpoint - The European luxury goods industry is facing significant challenges due to currency fluctuations and tariff policies, leading to a decline in stock prices for major luxury groups and a slowdown in market growth [3][4][7]. Group 1: Market Performance - Major luxury groups such as LVMH, Hermès, Richemont, and Kering have seen stock price declines of 26.31%, 17.98%, 19.84%, and 13.33% respectively over the past six months [3]. - The MSCI Europe Textile, Apparel, and Luxury Goods Total Return Index has dropped 17% year-to-date, underperforming the broader market by 27% [3]. - NDR's report indicates that the luxury goods sector's growth is slowing, partly due to the fading benefits of favorable exchange rates and the impact of U.S. tariff policies on global consumer confidence [3][4]. Group 2: Financial Results - LVMH reported a 4% decline in revenue and a 22% drop in net profit for the first half of the year, with recurring operating profit down 15% [7]. - Kering's second-quarter sales fell 15% to €3.7 billion, with Gucci's sales down 25% to €1.46 billion [7]. - Hermès experienced an 8% sales growth in the first half, significantly lower than the 15% growth reported in the previous year [7]. Group 3: Structural Challenges - The luxury goods sector is facing deeper structural challenges, including weak consumer confidence and brand value dilution, leading to a loss of approximately 50 million consumers over the past two years [11][12]. - The Z generation has seen a 7% decline in sales, equating to a loss of $5.7 billion in consumption, marking the largest drop among all generations [11]. - High-net-worth individuals are becoming more discerning in their luxury purchases, focusing on value and personalized services [11]. Group 4: Future Outlook - Bernstein has revised its global luxury goods revenue growth forecast for 2025 from an increase of 5% to a decrease of 2% [12]. - UBS estimates that luxury brands have increased prices by an average of 33% from 2019 to 2023, which may have overstretched market tolerance [12]. - Following a trade agreement between the U.S. and Europe, a 15% baseline tariff on luxury goods imported from Europe is expected to raise prices in the U.S. by an average of 2% and globally by about 1% [12].

Group 1 - The company aims to invest in firms with strong qualitative attributes, purchasing them at attractive prices based on fundamentals, and holding them indefinitely [1] - The investment strategy focuses on maintaining a concentrated portfolio to avoid underperformers while maximizing exposure to high-potential winners [1] - The company plans to publish articles on selected companies approximately three times a week, including extensive quarterly follow-ups and constant updates [1] Group 2 - The company may rate high-quality firms as 'Hold' if their growth opportunities do not meet the required threshold or if the downside risk is deemed too high [1]