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LVMH Sells Donna Karan International For £500m

August 04, 2018

LVMH Moët Hennessy Louis Vuitton has sold fashion house Donna Karan International for an enterprise value of £500m, in a rare divestment for the French luxury group. Antonio Belloni, LVMH’s group managing director, said that US clothing group G-III Apparel had made an approach for Donna Karan and LVMH had ‘concluded that the time was right’ for a sale. The outlook for Donna Karan has been uncertain since its founder stepped down as creative director of the eponymous fashion house this time last year.

LVMH does not publish results for individual brands but analysts at Citi and Exane BNP Paribas said Donna Karan had been singled out by the company as losing money. Thomas Chauvet, head analyst for luxury goods at Citi, has estimated operating losses of £21m at Donna Karan for 2016.

 

The French group had restructured the fashion house in the year since Ms Karan’s departure along with another American label Marc Jacobs, which analysts say is also loss-making. LVMH, whose brands include Christian Dior and Givenchy, has built a global empire by dusting off underperforming heritage brands and turning them into luxury powerhouses. The sale of the Donna Karan and DKNY brands is only the second time the French luxury group has sold an entire fashion label.

Mr Chauvet of Citi Bank said: “Donna Karan no longer fits within LVMH’s portfolio owing to their difficult positioning in the market and high capital requirements.” He said the sale “opens the door to other disposals including Marc Jacobs”. Luxury goods groups have experienced a sharp fall in demand amid a slowdown in China, falling oil prices and terror attacks in Europe, which have deterred some big- spending tourists. Donna Karan loyal customers won’t be affected by the sale. 

Leonid Mikhelson Raises £12bn For Yamal LNG Project

January 14, 2018

Yamal LNG Project has been financed by the amount of £12bn said CEO of Novatek Gas Producer Leonid Mikhelson earlier this month at a meeting with the Russian President Vladimir Putin. Novatek is currently Russia's largest independent natural gas producer and the seventh largest publicly traded company globally by natural gas production volume. The company was originally known as OAO FIK Novafininvest. Novatek is based in the Yamalo-Nenets Autonomous Region in West Siberia and maintains a sales office in the Russian capital.

Russian New Agency TASS reports that Chinese partners invested about £3.7bn and French partners £2.6bn. Shareholders of OAO Yamal LNG are Novatek (60%), China’s CNPC (20%) and French Total (20%). About £12bn has been invested to date, including two thirds being resources of the National Wealth Fund, as reported by TASS .Mr Mikhelson said in a statement, “The time is challenging. Novatek is in the sanction list. We received the second tranche (from the National Wealth Fund)and continue financing together with partners”. Today the OAO Yamal LNG is implementing the project of constructing the liquefied natural gas plant with the capacity of 16.5 million tons of LNG per year on the resource base of Yuzhno-Tambeiskoe field. LNG production start is scheduled for 2017.

 

Born to a Jewish family, Mikhelson began his career as an engineer for a construction company building a gas pipeline in Russia’s Tyumen region. In 1991 he was the general manager of Kuibishevtruboprovodstroy, one of the first companies to undergo privatisation after the dissolution of the Soviet Union. He currently holds the position of Chairman of the Board of Directors of ZAO SIBUR and serves on the Supervisory Board of OAO Russian Regional Development Bank. According to Forbes 2016 Mikhelson, an avid art collector, is worth £11bn. 

Dasha Zhukova Sells ‘Garage Art Magazine’ To Vice Media

November 17, 2017

Vice Media has acquired a controlling stake in Garage Magazine, an art and culture publication founded by Dasha Zhukova, the wife of Russian billionaire Roman Abramovich, as the youth brand pushes into contemporary art. Vice said it would beef up Garage’s online presence, building a digital video channel, expanding its editorial team and launching new international editions. Ms Zhukova, Garage’s editor- in-chief, will continue in her role.

Ms Zhukova and her husband, the owner of Chelsea Football Club, have become big players in the art world with a private collection that includes works by Lucian Freud and Francis Bacon. Ms Zhukova was also a founding partner of Artsy, an online art sales site, alongside Google’s Eric Schmidt and Wendi Deng, Rupert Murdoch’s ex-wife. Dasha Zhukova said the deal would “broaden the lens through which our audiences are exposed to art, architecture fashion and design in a multi-connected world.”

Garage has featured some of the biggest names in contemporary art, often in a fashion setting: a Damien Hirst- designed crotch tattoo of a butterfly appeared on the cover of the first issue, while the artist Dinos Chapman arranged a fashion shoot with clothes supplied by Marc Jacobs. The magazine is named after Moscow’s Garage Museum of Contemporary Art, the city’s equivalent of London’s Tate Modern museum. It has hosted exhibitions by artists such as Mark Rothko, Antony Gormley and Urs Fischer. Ms Zhukova founded the museum eight years ago in an abandoned 1920’s bus depot. Last year, it moved to a Rem Koolhaus- designed building in Moscow, Russia. Mr Tom Punch, the global executive creative director of Vice Media said the magazine would generate ‘an arsenal of creative ideas’ for the company.

Vice has partnered with the Times Group of India to launch online, mobile and TV content in the country, with plans to hire hundreds of local journalists, producers and filmmakers at a new production headquarters in Mumbai. Vice also received investment from media companies that include 21st Century Fox and Walt Disney, which last year doubled its stake to £300m. 

Starbucks’ Howard Shultz Opens Premium Coffee Chain

October 02, 2017

In a move that is signalling Starbucks’ increasing emphasis on the high end of the coffee market, Howard Schultz is stepping back from day-to- day operations of the coffee giant to concentrate on the overall strategy and innovation, including development of a premium business unit within the company.

 

The plan includes Roasteries, like the high-end coffee shops Starbucks first opened in 2014; the Reserve Stores, which sell and brew Starbuck’s more premium, small-lot Reserve coffees, and Princi, the high-end bakery chain Starbucks have just invested in. It may be a necessary move, given that in Starbucks’ most recent quarter, sales growth slowed globally. Sales were particularly worrisome in the Americas, where growth in stores open at least a year was 4 percent, compared with 8 percent a year ago. Executives said the slowdown was an anomaly. Still, “Starbucks realises it is running out of headroom for growth in many core markets, especially the United States,” said Neil Saunders, managing director of retail analysis firm Conlumino”. As such, it needs to develop new ventures to expand and compete in the market.”

Starbucks opened its first Reserve Roastery and Tasting Room in Seattle in 2014, a, 15,000 sqft showplace where the company’s Reserve coffee, its priciest, small-lot roasted beans and various ways of preparing coffee, including pour-over and siphon, are used.

The company plans to open a Roastery in Shanghai in 2017 and in New York City in 2018. Starbucks considers its Roastery a “stunning success” and plans to “accelerate and globalise the Roastery experience, building more roasteries in cities around the world.” Shultz said.

Safra Swiss Bank Announces 12 Percent Profit Increase

August 24, 2017

J. Safra Sarasin Holding Ltd., the Swiss private bank and asset manager owned by billionaire Joseph Safra, said profit climbed 12 percent while its assets under management were little changed. Net income increased to 230.5 million francs (£176m), boosting shareholder equity to £3.1bn, the Basel-based company said in a statement.

Safra Sarasin is hunting for acquisitions after integrating Morgan Stanley’s Swiss private banking business, which it bought last year. The company is part of a network of banks also spanning the US and Brazil controlled by Joseph Safra, Brazil’s third-richest individual, who is worth about £9.5bn, according to the Bloomberg Billionaires Index which is published every year.  “These strong results for 2015 demonstrate yet again the virtues of our proven conservative approach to banking,” Jacob Safra, vice chairman of the bank and son of Joseph Safra, said in a statement on the company website.

 

Most Swiss banks are struggling to improve profitability under the burden of the higher regulatory compliance costs, such as expenses related to a US crackdown on hiding assets in offshore accounts. Safra Sarasin last year agreed to pay a £65.7m penalty and said it would continue to cooperate with the US Department of Justice in exchange for an agreement it wouldn’t be prosecuted.

 

The Safra Group international network comprises of banking and financial institutions, industrial operations, real estate and agribusiness. It is present in the US, Europe, the Middle East, Latin America, Asia and the Caribbean. In the early nineteenth century Safra Freres et Cie., the family's first financial institution, was founded.  Further economic expansions have prompted the family to open new branches in Beirut, followed by Istanbul and Alexandria. In the early 1900s Beirut was chosen as headquarters of the newly founded Bank Jacob Safra. Following the end of World War II, Jacob Safra expanded the new banking activities toward Europe and Latin America. Today, they control £53.6bn in assets, of which £27.7bn are client assets and £4.5bn stockholders’ equity which continually grows each year. 

lan Goldfein Appointed President Of Brazil Central Bank

June 17, 2017

Goldfein had previously served as chief economist at Itau, Brazil’s largest private bank, deputy to the bank governor of Brazil, an advisor to the World Bank and advisor to the International Monetary Fund. Goldfein earned his PhD in economics from MIT. He is considered one of the leading and most well-regarded economists in Brazil, has worked as a senior lecturer at top universities and has published many articles. In addition to Portuguese, he speaks Hebrew, English and Spanish. He has family in Israel and visits often.

Goldfein’s appointment was announced at a difficult time for the country's economy, as the Brazilian Real continues to lose its value and in light of predictions claiming that the country’s economic growth is slowing down. Goldfein put the blame for the current situation on the government’s fiscal misconduct, saying that “We are currently carrying out a very important investigation that deals with corruption. Its trail of money flows from the private sector to public companies, from Petrobras (a state- owned oil company also involved in the scandal) to politicians. For the first time we have billionaires sitting in jail. We have politicians in jail. People ask, ‘Why is everything happening all at once?’

With an intensive investigation the kind of which we have never seen, the worst recession in our history and

the recent suspension, is it all just a bad coincidence? Obviously, it is not. What happened was that the middle class, which had thought it was going to get rich and whose aspirations were going to come true, must now face the decimation of its prosperous dreams.”

Ilan Goldfein estimated that in order to successfully get out of the current crisis, the Brazilian government will have to take unpopular measures, such as raising taxes, budget cuts and raising the age of retirement, which currently stands at an average of 50–55 years, up to 65. “The problem is that instead of facing reality, Brazil has entered a phase of denial and I hope to challenge this,” he said. 

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