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United Kingdom

Lisa Jucca

Breakingviews - The Exchange: Austerity in the age of populism

08 Mar 2019

MILAN (Reuters Breakingviews) - Fiscal restraint is going out of fashion. In his new book “Austerity”, Harvard professor Alberto Alesina sets out to explain when it’s needed. He tells Breakingviews of the hidden long-term risks of U.S. President Donald Trump’s policies and why Italy’s debt risks are not over.

Breakingviews - LVMH-Pernod bid talk makes for watery cocktail

04 Mar 2019

MILAN/LONDON (Reuters Breakingviews) - Ever since uppity investor Elliott Advisors turned up at Pernod Ricard late last year, Paris has been awash with talk that LVMH is lurking somewhere behind the gilded curtains, waiting to pounce on the $46 billion spirits group. The rumours reached a fever pitch in February when an equity research firm published a report detailing the potential financial benefits that might accrue from such a deal.

Breakingviews - French squeeze-out plans may tempt Arnault on Dior

07 Jan 2019

MILAN (Reuters Breakingviews) - France’s new squeeze-out plans may tempt luxury magnate Bernard Arnault to make a final swoop on taking his Christian Dior holding private. President Emmanuel Macron’s wide-ranging bill to make la Republique more attractive for business, known as “loi Pacte”, envisages cutting to 90 percent the bar for companies wanting to buy out listed minorities. The rule changes, combined with falling luxury stocks prices, may revive the magnate’s interest in taking Dior behind closed doors.

Breakingviews - Italy’s woes could spell LVMH moment for Moncler

02 Jan 2019

MILAN/LONDON (Reuters Breakingviews) - Remo Ruffini could be Italy’s answer to Bernard Arnault in 2019. Since rescuing Moncler in 2003, the entrepreneur has rejuvenated the brand into a goose-down success story. There’s a long way to go before he can use the growing strength of 7.5 billion euro Moncler to create anything like Arnault’s LVMH, worth 130 billion euros. But if he fancies building the first Italian luxury aggregator, now is a good time. Italian luxury is fragmented and valuations are historically cheap — the sector trades on 25 times expected earnings, compared to a five-year average of 28 times, Refinitiv data shows. Sales at upscale shoemaker Tod’s have been falling since 2014. Salvatore Ferragamo also struggles with revenue, and is in flux after matriarch Wanda Ferragamo’s death. Unlisted players like handbag-maker Furla may also come up for sale. U.S. and Chinese buyers have noticed. Michael Kors paid a hefty $2.1 billion for struggling Versace in September. China’s top textile player Shandong Ruyi and conglomerate Fosun snagged Swiss brand Bally and French couture house Lanvin respectively. Still, the rise of an EU-sceptic government in Rome embracing shaky budget policies could put a brake on global buyer enthusiasm. That gives Ruffini an opportunity to consider going beyond Moncler. The Italian is doing something right: sales jumped by 15 percent in 2017 and should do so again in 2018. His skills could be deployed to battle the generational shifts and changing consumer habits undermining some storied Italian brands. Investors who bought Moncler shares when it debuted in 2013 have seen total returns double, beating all listed peers bar Hermes. At 35 percent, Moncler’s EBITDA margins are second only to the famed French handbag maker among luxury players in Europe. And Ruffini is no stranger to M&A: in October his family vehicle Archive bought a 49 percent stake in small Italian fashion brand Attico. LVMH and peers Kering and Richemont are so shaped because their size brings economies of scale and diversification benefits. Although Moncler’s flagship jackets are in vogue, acquiring leather goods or watches could hedge against fickle tastes. If Ruffini can overcome Italian luxury’s traditional rivalries and get second-generation potential sellers onside, the path to Arnault-style status could be his.

Breakingviews - EU rebels will lay siege to Brussels

02 Jan 2019

MILAN (Reuters Breakingviews) - European Union rebels will lay siege to Brussels in 2019. Voters across the bloc will go to the polls in May to choose a new European Parliament. Simmering anti-elite sentiment and disenchantment with EU rules are expected to give nationalist parties a bigger voice. Sceptics could even infiltrate the European Commission.

Breakingviews - Italian banks to bear populism’s burden next year

21 Dec 2018

MILAN (Reuters Breakingviews) - May 27, 2019. It’s 6:25 a.m. on the U.S. East Coast. Mike P., a portfolio manager at Boston’s OMG Capital, messages a dealer contact in Milan via WhatsApp after checking the markets on his Eikon app.

Breakingviews - Italy’s budget truce may yet herald 2019 hangover

19 Dec 2018

MILAN (Reuters Breakingviews) - Italy’s anti-austerity leaders have backed down – a bit. Rome on Wednesday agreed a workaround on its budget deficit goals to end a damaging row with the European Commission. It brings welcome respite to Italian assets, but new challenges risk overshadowing the truce.

Breakingviews - Italy saves EU budget battle for another day

13 Dec 2018

MILAN (Reuters Breakingviews) - Spooked by hostile markets, Rome’s anti-austerity government is offering to trim its 2019 budget deficit goal by 0.4 percent of GDP. The U-turn may help Italy escape damaging European Union fines. Investors will be pleased, but the government may just be saving its battle for another day.

Breakingviews - Italy tries risky EU gamble on budget

19 Oct 2018

MILAN (Reuters Breakingviews) - Italy’s radical government is trying a risky gamble. Its promise to boost spending has triggered a clash with the European Commission. Lengthy procedures mean the spat could drag on until European Parliament elections in May. With radical parties gaining ground, the next Commission may be more lenient or weaker. But intense market pressure could spoil the plan.

Breakingviews - Bolloré’s exit leaves Mediobanca exposed

27 Sep 2018

MILAN (Reuters Breakingviews) - It suddenly feels like the end of an era in Italian high finance. Financier Vincent Bolloré has unexpectedly quit a shareholder pact that has pulled the strings at Mediobanca – and through it at Italy Inc. – ever since the bank was listed in 1956. The move is a mixed blessing for Chief Executive Alberto Nagel.

World News

U.S. lawmakers await details of Mueller's Russia report

U.S. lawmakers waited on Sunday for details of a confidential report into an investigation of Russian meddling in the 2016 election that has cast a pall over Donald Trump's presidency and raised questions about possible collusion between the Republican's campaign and Moscow.