Luxury Stocks: Profit from Indulgence
Not long ago, a young American woman I know well was on vacation in Paris and decided she would splurge on her favorite luxury brand. She went to the Hermès store on the Rue du Faubourg Saint-Honoré and bought a blue-and-gold blouse and a black skirt. Then, for the big purchase, she went back to the ground floor to buy a handbag. Hermès bags range from about $4,000 into the six figures. A salesperson told the woman she would have to send a text asking for a reservation the next day. The woman dutifully complied. Six hours later, a text (in French) came in response: "Because of a great number of requests, we cannot honor yours." Hermès wouldn't sell her a handbag!
Can there possibly be a better business than, $75) has found the formula. A harness and saddle maker founded in 1837, the company now sells all sorts of leather goods, as well as dresses, scarves, jewelry, furniture and more, in 310 stores around the world. With nearly 15,000 employees (9,000 of them in France), Hermès also manufactures goods for other luxury brands, including John Lobb shoes and Puiforcat tableware. The Dumas family--the fifth-richest in the world, with a net worth of $49 billion--controls Hermès, but the good news is that you can own stock yourself through American depositary receipts, which trade like any other shares on U.S. exchanges. (Prices, returns and other data are as of November 30.)
