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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. So global luxury sales

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Speaker 1: could exceed four hundred billion years in twenty twenty five,

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Speaker 1: boosted by a fuller recovery of tourism. That's the view

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Speaker 1: of Bloomberg Intelligence Now. The estimate comes despite the sector

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Speaker 1: in Europe facing a significant slowdown in the first quarter

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Speaker 1: on lower demand from China. Well that caused Caring shares

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Speaker 1: to tumble last month. After warning of a steep drop

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Speaker 1: in sales at its Gucci brand, now Carrying bought a

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Speaker 1: thirty percent stake in Valentino last year to try and

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Speaker 1: strengthen its portfolio, and in March, Valentino also named the

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Speaker 1: former Gucci creative director, Alessandro Michaele, and its new top designer.

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Speaker 1: So for a look at how the Caring Valentino partnership

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Speaker 1: is progressing and the outlook for the sector, I'm delighted

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Speaker 1: to be joined exclusively by Valentino's chairman, Rushi Mohammed Rashid.

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Speaker 1: He's also, of course, the chief executive officer of Qatar's

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Speaker 1: ma Hula, the investment fund that owns Valentino and, amongst others,

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Speaker 1: of French fashion house Bellman. So, mister Rashi, Thank you

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Speaker 1: so much for joining us in exciting times. It's difficult

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Speaker 1: times for the luxury sector, but they also started at

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Speaker 1: such a high. How do you see demand developing right now?

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Speaker 2: Well, the last three years have been really exceptional for

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Speaker 2: luxury products post a pandemic. They have been a very

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Speaker 2: significant search. I mean the average was seven percent, when

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Speaker 2: usually the luxury market grows around three four percent. We

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Speaker 2: have seen three constructive years of seven percent. I think

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Speaker 2: since second half last year, we have definitely seen a

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Speaker 2: slow down, not only in Europe but also in the US,

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Speaker 2: and there was always a question mark about how fast

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Speaker 2: China will recover. This year started with an expectation that

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Speaker 2: the luxury markets will grow between two to four percent.

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Speaker 2: My personal feeling it will be much less than that.

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Speaker 2: Probably it will be flat. The reality is that Europe

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Speaker 2: US is still very flat at the moment and China

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Speaker 2: is still weak. And we have already seen some companies

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Speaker 2: coming with some results, and it is very clear that

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Speaker 2: it is quite a challenging environment in twenty twenty four.

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Speaker 1: So what makes an exceptional brand? You're relaunching Valentino. The

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Speaker 1: former Gucci creative director Alessandro Mikael is he going to

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Speaker 1: focus on certain pieces. What do you think will sell

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Speaker 1: this dampened environment.

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Speaker 2: Well, Valentino had an amazing performance in the last ten

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Speaker 2: years and Pierre Paolo have been an amazing designer, and

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Speaker 2: we have done fantastic with a brand. I mean we

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Speaker 2: acquired the brand and it was less than two hundred

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Speaker 2: and fifty million today's one point four billion. And not

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Speaker 2: only the size, but also the reputation, the attractiveness, the

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Speaker 2: luxury positioning of Valentino have been exceptional.

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Speaker 3: It is true that we have a.

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Speaker 2: Change in designer today because we believe that there will

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Speaker 2: be a new chapter in Valentino, and we believe that

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Speaker 2: Valentino as a brand is so rich in terms of

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Speaker 2: its archive, in in terms of its history, that there

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Speaker 2: is so many dimensions and so many presentation of Valentino.

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Speaker 2: And we are hoping our new designer, Alessandro Michael, who's

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Speaker 2: an exceptional designer, will be capable of presenting something different

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Speaker 2: from a Valentino point of view. We know that in

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Speaker 2: the last few years that have been quite luxury prevailing.

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Speaker 2: My guests, like many answers in the fashion, this is

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Speaker 2: going to be over. So I think people, as usually

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Speaker 2: in fashion they get bored. So there is a cycle,

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Speaker 2: and I think fashion and colors and design and creativity

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Speaker 2: is going to come back whose force and we are getting.

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Speaker 3: Ready for that.

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Speaker 1: Yeah, and where are you expecting a pickup in luxury

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Speaker 1: actually to start from? Is it the US consumer that's

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Speaker 1: still all powerful for companies such as yourself.

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Speaker 2: Well, we have seen it. We have seen significant shift

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Speaker 2: in spending. That's explained the slowdown that we have seen

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Speaker 2: in the last nine months from goods to experience. So

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Speaker 2: we see travelers are spending more on hospitality, on experience,

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Speaker 2: on restaurants, on different aspects of entertainment. But again, like

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Speaker 2: everything else, this is cyclcal So we believe that US

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Speaker 2: is going to continue to be influential for US in Valentino.

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Speaker 2: US is a very very significant market. Europe have always

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Speaker 2: been the base of Valentino. But really the prospect for US,

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Speaker 2: especially with our new design and new approach now, is

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Speaker 2: how to start really much bigger business in China. But China,

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Speaker 2: as we know, I mean, there is a question mark

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Speaker 2: about how fast China is recovering, and the signs are

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Speaker 2: very clear that maybe in the second half of.

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Speaker 3: This year we are going to see a recovery.

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Speaker 1: Area has a partnership with Karen going well.

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Speaker 2: It has been a very very positive partnership. I mean

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Speaker 2: they have thirty percent of the company. We have a

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Speaker 2: strategic really alliance in that sense. The company has a

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Speaker 2: very clear plan for what to do in the next

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Speaker 2: few years, so that is not going to change. And

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Speaker 2: I think, you know, the attractiveness of the plan of

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Speaker 2: the company, the vision of the company, the brand have

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Speaker 2: been really the reason why this deal have happened.

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Speaker 1: Here is there. I mean they're concerned, of course, they're

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Speaker 1: so reliant on Gucci. If Guccie sales are down, do

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Speaker 1: you think you can even faster more? That partnership between.

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Speaker 2: Well, I think Carrying is an amazing company and they

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Speaker 2: have done fantastic If you look at what they have

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Speaker 2: done in the last ten years, fifteen years, it's an

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Speaker 2: exceptional performance. And even a brand like Gucci that people

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Speaker 2: are questioning, you know, how fast it for recover today.

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Speaker 2: Let's not forget that this is a brand that was

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Speaker 2: only two or three billion less than ten years ago.

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Speaker 2: Today it's you know, it's almost able digitia. So I

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Speaker 2: have great confidence, you know, in the capability and the

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Speaker 2: management of Carrying that they will be able really to

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Speaker 2: put all those brands on the right track to continued

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Speaker 2: an amazing grossteria.

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Speaker 1: I know. I think last time we spoke you have Bellman,

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Speaker 1: there were other companies that you're trying to relaunch.

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Speaker 3: That it's true.

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Speaker 1: Are you are you looking at anything to buy? Do

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Speaker 1: you think the portfolio will get bigger?

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Speaker 3: Sure?

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Speaker 2: I mean, we know that there is a big scarcity

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Speaker 2: in luxury, and luxury is about amazing brands who existed

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Speaker 2: for a long time, and you cannot just create a

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Speaker 2: luxury brand all of a sudden or from nothing. So

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Speaker 2: there is a bit of history, there is a bit

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Speaker 2: of legacy, there is a bit of archives in it.

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Speaker 2: Balmain is an amazing brand that we have acquired almost

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Speaker 2: six years ago. It have tripled in size and Balmai

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Speaker 2: is a very much representation of the French luxury houses

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Speaker 2: and we see that there is a huge potential for

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Speaker 2: Balman to continue to grow. It's very much depending on

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Speaker 2: the American market as well as European market. We are

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Speaker 2: not really big in Asia at the moment, but this

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Speaker 2: is really an early stage of the development of our brand.

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Speaker 2: Apart from that, you know, I'm always looking for supporting

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Speaker 2: new brands and smaller brands, and this is something that

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Speaker 2: I find a lot of joy in supporting, you know,

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Speaker 2: new designers and creative ideas coming out.

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Speaker 1: Yeah, how much are you sensitive to pricing? There has

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Speaker 1: been definitely a move up to price more for the

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Speaker 1: ultra high networth individual. Do you think that will continue

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Speaker 1: for your goods but also in general for the luxury industry.

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Speaker 2: Well, it's it's a reality that post pandemic, there have

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Speaker 2: been a very significant increase of price. I mean, well,

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Speaker 2: we we lived, we're still living in an inflation situation.

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Speaker 2: I mean, I know that everybody is concerned about how

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Speaker 2: inflation is impacting economy and how sticky it is, and

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Speaker 2: we are seeing some stickiness there.

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Speaker 3: But I would I would I would say.

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Speaker 2: That the level of inflation and increase of prices have

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Speaker 2: been much higher in luxury and exclusive products. And we

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Speaker 2: can see it even in hospitality, even in restaurants, even

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Speaker 2: anything that is luxury and exclusive almost double in price

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Speaker 2: in the last few years.

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Speaker 3: And I think that is something.

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Speaker 2: That we have to to to iron out in the

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Speaker 2: next few years. I think there is a bit of

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Speaker 2: a challenge for luxury products in terms of price positioning

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Speaker 2: At the moment, some brands doing better than others, and

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Speaker 2: that explain, you know, the disparity between the performance and

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Speaker 2: different brands. But you're right, I mean, pricing is one

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Speaker 2: of the main issues now in luxury.

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Speaker 1: There's a lot of talk about what happens if we

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Speaker 1: have Donald Trump in the White House with extra terrorsts.

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Speaker 1: I don't know whether there's been an each other of

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Speaker 1: these terror's also touching luxury goods, But is there anything

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Speaker 1: that actually some of you know, these high end luxuries

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Speaker 1: companies can do to try and mitigate that.

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Speaker 2: Well, we always worry when you know, we have a

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Speaker 2: scenario of Donald Trump coming back. We don't know really

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Speaker 2: how the impact is going to be in different places.

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Speaker 3: But the reality, of.

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Speaker 2: Course, the American economy is doing well and I assume

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Speaker 2: it will continue to do well, and that is very

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Speaker 2: important really for the health of the global economy. I

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Speaker 2: think the same goes to China. We want to see

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Speaker 2: China also recovering and doing well. It's very very important

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Speaker 2: that China, because we should not understimit that China, from

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Speaker 2: a gross contribution point of view, have been a significant

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Speaker 2: not just the luxury but to the global economy. So

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Speaker 2: China's slowing down is not also a good news for

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Speaker 2: the global economy. So Europe of course remains there and

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Speaker 2: there is a big question about Europe how they will

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Speaker 2: pull it all together, which is something that we hope

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Speaker 2: that they can do it in a positive way.

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Speaker 3: But you're right. I mean, at the end of the day, the.

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Speaker 2: Level of growth that we will see globally will impact

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Speaker 2: the luxury but also the reality of luxury today is

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Speaker 2: that the middle class in many economies is growing significantly.

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Speaker 2: So we have China, the China story in the past,

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Speaker 2: now we have the India story.

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Speaker 3: We have to look at what happened.

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Speaker 2: Many Asian countries are continuing to develop in a very

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Speaker 2: significant positive way.

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Speaker 3: So in addition to.

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Speaker 2: The traditional America, Europe, Japan, we are seeing a lot

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Speaker 2: of companies and Marcus coming up even in Africa.

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Speaker 1: You seem pretty excited about working with Alexandra Michail. What

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Speaker 1: are you most looking forward to. What do you think

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Speaker 1: he'll he'll bring to the brand?

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Speaker 2: Well, I'm very excited to work as Valentino as a

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Speaker 2: brand that's starting was because it's an amazing brand and

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Speaker 2: I believe that Alessandro, you know, following an amazing, you know,

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Speaker 2: performance of Pierre Paolo will be able really to bring

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Speaker 2: a new chapter for Valentino.

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Speaker 3: Was a completely new.

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Speaker 2: Dimension, as I said, based on this very rich archive

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Speaker 2: that mister Valentino Garavani have created. It's an amazing archive

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Speaker 2: and if you look at it, you will not believe

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Speaker 2: how much is a diversity there. And I think Alessandro

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Speaker 2: will probably bring another angle from that archive that we

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Speaker 2: have not seen for some time now in a very

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Speaker 2: very attractive way.

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Speaker 1: It is Russia. Thank you so much for joining us today.

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Speaker 1: That was Rashid Mohammed Rashid, the chairman of Valentino and

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Speaker 1: Burma and chief executive of Mahula