Good morning from London. Abu Dhabi's sovereign wealth fund, Mubadala, is reportedly in talks to acquire a stake in London’s Heathrow Airport. If successful, it would join Saudi and Qatari investors who already hold stakes.

BUSINESS
Middle East Investing Heavily in Europe

The Abu Dhabi Investment Authority (ADIA), the largest Middle Eastern fund, has $790 billion in assets, up $100 billion y-o-y. The Kuwait Investment Authority (KIA) is next with $750 billion, up $12 billion y-o-y. The Saudi Arabia’s Public Investment Fund (PIF) has grown from $230 billion in 2018 to over $600 billion now, with a goal of $1 trillion by 2025.

PIF's notable investments include Aston Martin, London Heathrow, LIV Golf, and Newcastle United, similar to Abu Dhabi and Qatar's investments in Manchester City and PSG. ADIA focuses on real estate ventures in the UK and European telecom sector. Companies like Tesla and Uber attracted billions in Gulf tech investments. In response to climate change, Qatar (QIA) invested $2.4 billion in RWE in Germany, beside in luxury brands and acquired retailers like Harrods.

LUXURY
Harrods Opens First Members-Only Club

Harrods has opened a private members’ club in Shanghai called the Residence, to strengthen ties with affluent Chinese clients, allowing just 250 members in for a fee of approximately 18,000 euros annually. Located in the historic Cha House, the Residence offers access to Harrods-branded private jets and a fine dining experience from Gordon Ramsay's first restaurant in China plus Harrod’s concierge services.

Last year, 16% of Harrods’ sales were to Chinese customers, with profits nearly tripling to £158.4m. Sales surged 52% to £994m up to the 28th of January, as per Companies House records.

Based on my time in the luxury industry, I've seen that winning over the Chinese market isn't easy from a distance. Being there, on the ground, is key, and it's more than just opening a shop. It's about building real, personal ties with customers by giving them experiences they can't get anywhere else.

REAL ESTATE
A New Way of Living

Six Acre Capital, in collaboration with Dasha Zhukova Niarchos, has launched the first residential building under the Ray brand in Philadelphia. The $34 million project envisions a creative hub where aesthetic, culturally-inspired apartments are combined with publicly-accessible art spaces. The 103,000 square foot building features six artist studios on the ground floor, 110 residential units - 25 studios, 67 one-bedrooms, 18 two-bedrooms - a free communal art studio for residents, and a commercial space. Two-bedroom units start from $2200. For those not planning to move to Philadelphia, Ray Harlem is set to open in 2025.

STARTUP
Pay Your Rent With A Credit Card

Bilt, a startup, allows users to pay rent with a credit card. The primary obstacle to this payment method is the 1 to 3% merchant fee charged by credit card companies, which landlords are often unwilling to bear for large rent payments.

However, Bilt has formed alliances with landlords of 4 million apartments, convincing them to accept credit card payments for rent. Additionally, tenants can collect reward points which can be redeemed in several ways, including using them to cover next month’s rent or a downpayment on a future home.Recently, Bilt raised $200 million and reached a valuation of $3 billion.

FASHION
Luxury’s Pop-Up Game

In 2023, luxury brands noticeably collaborated with luxury hotels, resorts, and beach clubs at popular destinations. They took over promotions, brand exposure, pop-ups, exclusive collections and unique experiences. The novelty is in luxury brands immersing fully into a parallel world, sharing a sophisticated clientele and potential new customers.

Are these activities profitable? From my experience with luxury brands, pop-up stores are great for brand awareness, but they often aren't financially sensible. Here's why:

• Installation, materials, and rent can be costly.

• Shipping, taxes and duties can increase expenses.

• Limited space restricts stock, necessitating an online option for immediate purchases.

• Staffing costs must also be considered.

Define your goal clearly, such as a specific turnover. Offer unique, high-value items at your pop-up store to reach your target despite a smaller stock.

This strategy, while requiring a significant budget, effectively boosts customer engagement and brand exposure by creating memorable experiences for social media sharing. However, the growing prevalence of these activations requires innovation to avoid mediocrity, particularly for luxury brands.

FINANCE
Too Broke For Dior?

People often ask me which pieces are worth buying and investing in. While some items, like a Hermès bags, are no-brainers due to their appreciation in value over time, it's less clear with other items. With rising inflation and geopolitical uncertainties, people tend to cut expenses in non-essential areas. Some might argue that bags and jewellery are important for human survival, but this doesn't affect the ultra-wealthy. However, most people have to decide whether investing in luxury goods makes sense.

The ideal case would be to purchase items that appreciate in value or at least don't depreciate much. You can find this information by checking the price of the items on resale websites like Vestiaire &Co. A Dior Bag holds its value, while Gucci bags usually decrease, depending on the piece. Jewellery, watches, and bags are the best investments. Shoes are harder to sell due to sizing issues. Collectable sneakers are a different case, as they have their own market. Clothing can also be difficult to sell unless it's a key piece from a ready-to-wear focused brand like The Row or Brunello Cucinelli, which seem to hold their value.

HERR OBER
London: Beigel Bake

London’s most famous 24/7 bakery , | Est. 1974, | Yes, it's worth the queue!

DEEP DIVE
The Rise of AIMÉ LEON DORE

first met Tedi Santis in 2016 in Mykonos. He told me that he had just launched a brand called Aimé Leon Dore:Aimé is French for “loved,” Leon is his father’s nickname, and Dore is a shortening of his birth name, Theodore. Tedi was raised in New York City by Greek parents, mostly working in his family's diner. Today, Aimé Leon Dore has become one of the fastest-growing brands in the menswear market, with LVMH holding a minority stake.

The connotation of Aimé Leon Dore builds on their core values of Teddy Santis’ Greek roots, the endless inspiration of the New York Queens area consisting of Hiphop culture, Basketball, and 90’s fashion.

Community: With no experience in the fashion business, Tedi began analyzing and understanding brands such as Ralph Lauren and Supreme. He realized that it's not about creating clothes, but rather speaking to and forming a community with shared values. “When you’re buying into ALD, you’re buying into a world — you’re buying into a perspective more than a garment,” says Tedi.

Signature Visuals: Aimé Leon Dore's brand identity reflects its values and associations, evident in every detail, from its Greek roots to its 90s hip-hop and urban influences. exemplifies a new branding approach of being self-referential through conceptualization. This is evident in their lookbooks with their distinct Aimé Leon Dore styling, consisting of a mixture of sportswear with tailoring, inspired by the iconic Ivy League style.

Store As A Destination: From 2014, Santis ran an ALD pop-up in NYC. With investor Sam Ben-Avraham's help in 2016, ALD opened its first flagship store on Mulberry Street,NYC in 2019. The store, featuring a café and vintage sports memorabilia, refined the shopping experience and built the brand. This concept was introduced in London in 2022 and a remodeled, expanded flagship store reopened in May 2023. Pre-pandemic, ALD was available in 160 stores globally. Recently, ALD reclaimed its exclusivity. It's now only purchasable at its two stores in NYC and London or online. Having no retail partners allowed Mr. Santis to control the company’s narrative from the inception of design to the point of sale.

Collaborations: ALD began its significant partnership with New Balance in April 2019, marking its most successful collaboration yet. Other key partners include Porsche, resulting in three releases featuring custom vintage Porsches like the 964 Carrera 4 and other brands such as Woolrich.

Why Did LVMH Invest ?
LVMH is fascinated ALD's unique strategies, as explained by Mr. Arnault: ALD's avoidance of fashion shows and reliance on seasonal drops, its lack of paid marketing, and the success of its New York flagship store, which attracts queues of people. Eventually, LVMH invested in a community rather than just a brand.

In today's world, where individualism is highly valued, people still seek a sense of belonging. They want to express their shared values and build communities. Only a few brands can authentically cater to this need, and ALD is one of them.

NEWS
Headlines

• OpenAI is now worth $80 billion

• Nvidia lost $78 billion in market value

• Saudi Arabia’s $1 trillion project ‘The Line’

• European Real Estate Outlook 2024

• The UK's recession severely affects retail

• Rothschild &Co. to buy Oscar De La Renta

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