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PR Newswire
14-11-2021, 06:54 PM
Luxury is an evergreen industry with high barriers. So companies like THG -- or better yet, the brands they distribute -- should always be on the radar of investors for the opportunity to acquire them cheaply.
The pandemic crash of 2020 was unlike any other and luxury has done surprisingly well. With the resumption of travel in the next 1-2 years, I am also inclined to think that their results will be more so-so than spectacular. Things are slowly going back to normal. But of course, it won't be the same.
THG has a successor so investors can be somewhat assured that the magic of TYC will continue for the next 10-20 years.
But at current stock prices (about 2x p/b), THG does not look undervalued to me. Its access to brands is its biggest (and possibly only) moat. And luxury purveyors need not worry about raising their selling prices. But it is, after all, still a brick-and-mortar retailer, and that puts some limitation on the markets it can expand into.
The pandemic crash of 2020 was unlike any other and luxury has done surprisingly well. With the resumption of travel in the next 1-2 years, I am also inclined to think that their results will be more so-so than spectacular. Things are slowly going back to normal. But of course, it won't be the same.
THG has a successor so investors can be somewhat assured that the magic of TYC will continue for the next 10-20 years.
But at current stock prices (about 2x p/b), THG does not look undervalued to me. Its access to brands is its biggest (and possibly only) moat. And luxury purveyors need not worry about raising their selling prices. But it is, after all, still a brick-and-mortar retailer, and that puts some limitation on the markets it can expand into.