The Hour Glass

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hi dydx,

Thanks providing more insight. The google map has annual photo booklet to do the comparison YoY from 2014 onwards till 2021. Based on the photos, the tenancy probably changed hands at least once. The decision to remake 192 Pitt Street, Sydney was stated in AR20:

re-purposing and refurbishment of one of our investment properties in Sydney - 192 Pitt Street into Australia’s most prominent Rolex stand-alone boutique

That particular crossroad now has 4 watch boutiques. I reckon it is going to attract more than its fair mindshare of shoppers who are looking to spend on a timepiece.

There is a gap of 5years (and at least 1 tenant turnover) between the retail property purchase and repurpose. I reckon this shows 1 of the key principles to success in life - You don't wait for apples to rain before you go get a basket. You get ready your basket and then tell the gods to rain apples.
Principal doing well, dealership performing well or above expectations, landlord has little reason to replace tenant. Not the same when principal and/or dealership are not performing well. Apply to prime location.

For huge mart operating at outer region of a city that can pull in crowds, it makes sense to own instead of renting. I bet the rental before a mart and after a successful mart will be huge. For shopfront at the intersection of a prime location, it might not be so clear cut, but I think owning it is still a better option or make more sense strategy wise. Throwing away the textbook question of allocation of capital - rent vs own.
Yearend is the all important period for THG's sales. The retail sales for Watches & Jewellery from Singstats look decent and so could we be expecting continued topline growth in the coming 2H24 reporting due in a couple of months? For context, 2H23 itself wasn't a weak period for THG.

Watches & Jewellery
Oct2023: +6.1% YoY, +8.3% MoM
Nov2023: +12.9% YoY, +1.5% MoM
Dec2023: +6.0% YoY, -0.4% MoM

"Oriental Watch Company has joined forces with YAS Hong Kong and QBE Hong Kong launch TimeCare, a blockchain-powered luxury watch insurance service in Hong Kong."

Interesting business line to add to a traditional watch retailing business.
Well, I used to wonder what keeps the salesmen at luxury watch-pieces occupied since there are only display units available. Now i know they are in the Sherlock Holmes' business.

The comments' section is probably more interesting than the 6min video itself.


That's exactly the reason why I went to the Omega, Tudor and Breitling AD instead. Don't treat me like a fool or beggar when I'm willing to pay 8.000€ for a watch

"The solution that some of the Rolex ADs I have visited have adopted is to focus on discontinued models, which goes some way to solving the problem of more expensive pre-owned being sold alongside new watches, and to devote as little time, money and space as they can to the CPO programme, without upsetting Rolex.

In other words, they get a tick in the box that says they are part of the mission outlined by Rolex and fully behind the programme, but at the same time they can safely write-off the cost of CPO and get on with what they like doing best: earning 37% margins on every new watch they sell."
THG started SBB almost 3 years ago. With its recent announcement of FY24 results, it would be apt to look whether it was "worthwhile" buying at >NAV after all.

(1) FY24: 15mil, FY23: 55mil, FY22:34mil. Total cost of SBB = 104mil

(2) Reduction of share count ('000):
*Original share count = 705011
*Post SBB share count = 649929

(3) Incremental improvement to EPS based on FY24 results:
*FY24 NP = 156.485mil
*Original share count EPS = 156485/705011 = 22.2cents
*Post SBB share count EPS = 156485/649929 = 24.1cents
*Incremental improvement to EPS = 24.1 - 22.2 ~ 1.9cents

(4) Incremental earnings gained by SBB = incremental EPS*Original share count = 1.9cents*705011 ~ 13mil

(5)  P/E of SBB = Cost /earnings = 104mil/13mil ~ 8


To summarize, the 104mil SBB program over the last 3 years, was done at an earnings yield of ~12.5% (inverse of PE) and "added" 13mil to earnings. Personally, I have to agree that the SBB looks to be "value oriented" as per Dr Henry Tay. To a certain extent, this "additive earnings" from SBB also help to cushion the overall inevitable drop from the prior boom.
(01-07-2022, 02:55 PM)weijian Wrote: The luxury watch market is durable but no surprises that there is strong correlation with prosperity, hype and greed.

Crypto Meltdown Claims Rolex and Patek Philippe as Victims

The crypto meltdown has claimed its first luxury victim: the Rolex Daytona.

After reaching record highs earlier this year, prices for the most desirable watches on the secondary market, including the coveted Rolex, have now fallen.

Googled and found the Subdial50 index here:

Fast forward 2 years, the subdial index indicates that secondary market watch prices have dropped another 30%, without a bottom in sight.

Subdial index:

For THG fanboys on VB, a comparison between AR23 and AR24 of the outlets shows some interesting changes:

(1) Spore: 3 outlets (2 of them WOS) were closed in the heartlands - Parkway Parade/Tampines Mall/NEX. A local horologist now needs to venture downtown or eastwards to Changi Airport Jewel.

(2) Msia: The area around Bukit Bintang Sentral station has already lost its allure for some time. So no surprise that THG finally closed its long-standing Lot10 boutique and opened 2 branches in 1MDB-inspired TRX, in addition to 2 more boutiques in affluent urban areas.

(3) Thailand/Vietnam: Total of 9 new boutiques (1 of them FP Journe mono brand boutique). Plenty of Chinese tourists and a rising Asean middle class, ready to show off I suppose.

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