The Hour Glass

[pacyfiq]

Any infos the the 2016 Annual Report, somebody have it already?

[retired1again]

Jannie downloaded the 5 mil shares to Henry as announced in six.

[Boon]

Any infos the the 2016 Annual Report, somebody have it already?

http://www.sgx.com/wps/portal/sgxweb/hom..._financial

Chairman's statement has always been an interesting read................. 

__________________________________________________________________________________________________________________

[brattzz]

"I will be the first in my organization to admit that in
the months that have passed since the beginning of
Chairman’s statement
15
2014, our executive committee have engaged in
many moments of deep reflection and examination.
As financial market volatility and economic uncertainty
cast a wet shroud over the enthusiasm of global luxury
shoppers, questions over the veracity and validity of
our assumptions and the developmental road map we
drew up in 2012 have been raised.
Principal to this was defining the point in the
economic cycle we were currently in. Though none
of us are trained economists, our modus operandi
has always been to deploy capital during down
cycles. In 2012, we were accurate with our
assessment of the macro environment and
anticipated an impending softening of the markets.
Our view stood that at the very latest, the market will
have bottomed out by year-end 2015 and mapped
our growth plans on that basis to capture the
upswing that would ensue (As an aside, one must
appreciate that opening a retail store doesn’t
happen overnight; it can take as long as 3 years of
planning and negotiations). We certainly did not
anticipate major structural shifts to occur in the
global economy but by mid-2014, were persuaded
that post 1990 Japan may not have been an isolated
case and the world’s economies were entering a
period of secular stagnation characterized by low
growth, low consumption and low returns. Singapore
and Hong Kong are prime examples where we are
already experiencing a slow-burn recession like
environment. "

Chairman's take... prepare for slow-burn....at least till 2020...

[brattzz]

took some time off today to attend THG AGM @ Marriott, coffee was good!

Positive News,
FMR LLC share holdings now up to 9% from last week.

Negatives,
Chairman's sober message,
1) Luxury retails are bad, macau down 70%, HK down 50%.
2) Entire Regional Lux Retail industries in slowburn/consolidation mode, and looking for new biz M&A.. hopefully not di-worsification!
3) Chairman put into a corner by Mr Mano's comment on big golden handshake package/non-attendence of Dr Janice....

Group MD-Michael,
1) Focus on IT/online presence to enhance stores biz
2) Credit line MTM 500 milos standby for potential sell out..

No decision yet on which side to take, digital or mechanical watch stand...

Overall, quite a good AGM,

oh, and lots of rushes for the buffet, so maybe it's not a good choice if u are there for the food...

Looking forward to:
1) Bonus share issue / stock split (to attract more funds in)
2) M&A of competitors throwing in the towel...
3) Diworstification?

[dydx]

THG's latest multi-brand watch boutique - and probably the group's biggest in SG too! - strategically located at probably the best spot on the ground level of Vivo City Shopping Mall has recently opened for business.....
http://www.vivocity.com.sg/mapsk?locatio...54&level=1

Shareholders should find time to visit the store.

[zerobeta]

There are a few concerns I have on Hourglass to which fellow buddies perhaps can chip in their opinions:

1) There's no discussion on the Laduree expansions, I understand that the contribution is probably still immaterial but at least talk about the developments, their plans, etc. considering 10% of their stores now are dedicated to Laduree already

2) What's the rationale of purchasing an extremely expensive investment property in Sydney last year? On a per sqm basis the price they paid is way above the market average. How's the retail property market doing in Australia? Are they going to eventually use this space for their own store? With such an expensive acquisition, how much rental yield are they generating? Based on the footnotes, the NOI yield of their investment properties is only 3%..

3) Why are they still constantly adding new inventories while the industry is still suffering from weak demand and inventory glut? In the past 2 years alone they already added SGD 57 mln to their inventories while their DIO has already increased to 7 months from 5-6 months... Also the Swiss watch exports just saw their worst first half year decline ever while the industry players like Cortina, Hengdeli, Sincere, Emperor, Oriental Watch now on average need more than a year to clear their inventories from ~6 months a few years ago... these retailers will destock their inventories and flood the market with more discounts.... will this lead to more provisions/ bad inventories for Hourglass?

[lkw175]

took some time off today to attend THG AGM @ Marriott, coffee was good!

Positive News,
FMR LLC share holdings now up to 9% from last week.

Negatives,
Chairman's sober message,
1) Luxury retails are bad, macau down 70%, HK down 50%.
2) Entire Regional Lux Retail industries in slowburn/consolidation mode, and looking for new biz M&A.. hopefully not di-worsification!
3) Chairman put into a corner by Mr Mano's comment on big golden handshake package/non-attendence of Dr Janice....

Group MD-Michael,
1) Focus on IT/online presence to enhance stores biz
2) Credit line MTM 500 milos standby for potential sell out..

No decision yet on which side to take, digital or mechanical watch stand...

Overall, quite a good AGM,

oh, and lots of rushes for the buffet, so maybe it's not a good choice if u are there for the food...

Looking forward to:
1) Bonus share issue / stock split (to attract more funds in)
2) M&A of competitors throwing in the towel...
3) Diworstification?

Hi Brattzz,

Thanks for sharing some pointers from their AGM.

The luxury retail biz will indeed be challenging moving forward. I think the Chairman did comment on this in the latest AR.

But interestingly, their inventories level didn't really reduce... are they preparing for the shift from conventional retail model to online model?

Chairman is still on-board and guiding his next generation... so it is interesting to see the next phase of development....

Sold my holdings after they announced their FY results... but still monitoring...

[CityFarmer]

Inventories of luxury watch retailer, is very unique among other retailers. Inventories are valued at the lower of cost and net realisable
value. Most other retailers' inventories are ending-up with a "lower net realisable value (than cost)" over time, but luxury watch retailers' inventories might be ending-up with a "higher" value over time. After-all, appreciation of value over time, is the marketing strategy of most luxury watch makers.

One small note, the company might be taking advantage of weaken Swiss franc recently. It hurt watch makers, but benefit watch retailers.

(not vested, but monitoring. Learning on biz model of luxury retailer)

[brattzz]

tat's only for investment grade watches, aka, 1900's rolex, PP, where there's only a few NOT in private collector's hands....

the general sales watches are hardly that valuable actually...

Guess THG might have to admit "mis-expanded+hunker down" strategy this time round...
At least for the 4-5 years i guess...