Three Things (2/15)

Wednesday, Feb 15th 2023


Louis Vuitton picks Pharrell

The richest person in the world is neither Jeff Bezos (Amazon) nor Elon Musk (Tesla). It’s Bernard Arnault of LVMH. Arnault’s crown jewel is a little fashion business known as Louis Vuitton. One of the most coveted roles in that crown jewel is Menswear Designer. Arnault just tapped Grammy-winner Pharrell Williams for this, filling a gap that was previously held by the globally renowned Virgil Abloh. 

“Louis Vuitton is the juggernaut that helps power the wider LVMH luxury empire…Sales at the label crossed €20 billion ($21.4 billion) last year and although LVMH doesn’t break down profit by brand, analysts at HSBC have estimated Louis Vuitton generates about half of the group’s annual profit.” (Bloomberg)

Pressure’s on. 

Bright spot in tech: Airbnb

Airbnb stock jumped +12% Tuesday after posting a surge in growth and their biggest cash flow quarter ever (reminder: $ cash that comes out of the register is the most important thing for a business in the long run). One of the biggest brightspots was cross-border travel. Per the CEO Brian Chesky: “consumer confidence remains high” (ABNB). 

Remember how we talked about Facebook getting its mojo back via execution focus? You can see Airbnb making a similar move. While Wall Street likely will underappreciate this, if you look at the top, Chesky outlines the company’s top 3 goals for the year and one of them is “perfect the core service”. This is critical. In our opinion, Airbnb’s ability to grow and drive cash out of the register rests upon how insanely great their core is. Although everyone has a friend who’s skeptical about Airbnb, Chesky & Co. are going to make something they can’t refuse. 

Follow up: The Inflation Dragon

Following up from our note re: all eyes on the Tuesday inflation figures: “The consumer-price index, a closely watched measure of inflation, edged down from 6.5% in December, the Labor Department said Tuesday. That marked the seventh straight month of easing inflation since peaking at 9.1% in June, the highest reading since 1981. But the cooling trend is moderating.” (WSJ)

The market was flat yesterday. Meaning, this was neither exceptional news nor bad news - it’s tracking. Said differently, people are now stomaching that inflation trends look good, but how long this fight will take remains uncertain.

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