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In today’s newsletter we bring your the Luxury Edition where we discuss LVMH entering the $30 billion dollar a year watch market, we examine how Rick Ross built a life of luxury, we look into Jay Z's million dollar luxury watch collection, the rich don’t customize Honda 2000s or Toyota Celiacs - they soup-up Rolls-Royces and Lamborghinis, and quiet luxury is taking over fashion.

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Jay-Z Partners With Italian Luxury Fashion House Moncler

Fashion Conglomerates

The LVMH Group, as it is officially known, is making a big push in 2024 to gain market share in the global luxury watch industry, and they are kicking that effort off with a newly formed watch division and a curated selection of higher-priced watch models.

If you’re not already familiar with LVMH, you’ve surely heard of the two companies that make up their initials: Louis Vuitton and Moët Hennessy.

The LVMH Group is a French multinational conglomerate that was created in 1987, and founded by French investor Bernard Arnault, Alain Chevalier who was the CEO of Moët Hennessy, and Henry Racamier who was president of Louis Vuitton. They set out to create a French holding company with a focus on the luxury goods industry.

Today the company is composed of more than 75 brands that fall into one of the five sectors of the luxury industry: Wines & Spirits, Fashion & Leather Goods, Perfumes & Cosmetics, Watches & Jewelry and Selective Retailing. Those five sectors contributed to the LVMH Group’s $92.83 billion in sales in 2023, giving the company a market cap of $439.89 billion.

LVMH owns ten companies that either specialize in watches or have their own line of high-end watch brands including Louis Vuitton, Chaumet, Hublot, TAG Heuer, Zenith, Dior, Bulgari, Tiffany & Co., Fred, and Repossi.

The global watch market was estimated to be $97.22 billion in 2022, and expected to reach $148.50 billion by 2031, with a growth rate of 4.82% CAGR between 2023–2031, according to Straits Research.

LVMH’s jewelry and watch division posted sales of $11.8 billion in 2023, and now they want to expand that with their newly formed LVMH Watches group, headed by the LVMH CEO Bernard Arnault’s 29 year old son, Frederic Arnault, who will now be the CEO of LVMH Watches, which will be comprised of their three largest watch companies including TAG Heuer, Hublot and Zenith brands. Together those brands had an estimated $2 billion in sales last year.

LVMH Watches will focus on both high end super-spenders who have shown an appetite for investing in authentic, reputable and timeless brands like Bulgari’s coveted yellow-gold Serpenti Secret watches that retails for $350,000. Another focus will be on women’s watches catering to more self-made women in addition to those that come from families with generational wealth. LVMH is especially interested in the increasing power women have demonstrated in the luxury goods market in terms of their independence, autonomy and purchasing power.

Already, LVMH Watches has a hit on their hands with their new TAG Heuer that uses lab-grown diamonds in their Carrera Plasma Diamant d’Avant-Garde Chronograph Tourbillon watch, which is priced at around $500,000, and has a two year waitlist.

It’s good to be luxury brand LVMH these days.

LVMH takes aim at $30 billion watch market with high-end, reinvented pieces

HipHop Luxury

In the world of HipHop there are ballers, then there’s Rick Ross!

Before we get into his luxury lifestyle, let's level-set a bit and discuss just who is Rick Ross.

Rick Ross was born William Leonard Roberts II in Clarksdale, Mississippi, and raised in Carol City, Florida where his love of the sunshine state took hold. He went to Albany State University in George on a football scholarship, but dropped out of college after only a few weeks to move back home to Miami and start his rap career. Things were slow going, and he picked up different jobs including a stint as a corrections officer before finding success with his debut album “Port of Miami” that was released in August 2006 and debuted at the top spot of the U.S. Billboard charts selling 187,000 units in its first week.

From an early age he knew he was drawn to the finer things in life; he just need to find his path in life that would afford him the luxury brand-fueled lifestyle he aspired to.

Fast forward nearly two decades and Rick Ross is worth an estimated $150 million dollars, and has his sights set on becoming a billionaire through not only his music, but also his fledgling franchise restaurant group and his own luxury liquor brand named Belaire Champagne.

In addition to the five homes he owns in Georgia and Florida, and his car collection that he estimates contains 200 vehicles, Rick Ross’s latest acquisition is his prized all black Gulfstream G550 that humbly has his name “Rick Ross” emblazoned in gold on the side of the plane, with each S styled as a dollar sign in pretty ballin’ logo that he designed himself.

And no fresh-out-of-the-factory private jet will do for Rick Ross. After purchasing the airplane he hired the private-jet design firm Duncan Aviation to fully customize it to his style and high-end luxury finish, including custom sewn Louis Vuitton blankets for added comfort during those long flights criss-crossing the globe in luxurious style.

How Rick Ross Built a High-Flying Life of Luxury

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Watches

With a new worth of $2.5 Billion with a capital B, Jay-Z can afford pretty much anything he wants, and what he wants is all the luxury watches he can buy.

Now Jay-Z’s luxury watch collection is growing with the addition of a $5 million Hublot Big Bang, which is made of 18-karat white-gold encrusted with 1,282 diamonds that took more than a year to source all the diamonds, including the more than 100 carats of baguette diamonds on the watch itself plus another 179 baguette diamonds white gold case the watch comes in. Then we have the bracelet that you strap to your wrist that comes with 782 baguette diamonds. As if that wasn’t enough he also received as a part of the gift the watch’s white gold case that has an additional 179 baguette diamonds.

The watch took 14 months to assemble, and 40 months to source all the diamonds. The watch was given to him by his wife Beyoncé, and is one of the most complicated timepieces ever made.

Total cost for this one-of-a-kind watch: $5,000,000 million dollars.

This is by far the crown jewel of Jay-Z’s watch collection, but it is hardly alone.

Jay-Z owns enough watches to practically wear a different watch for every day of the year!

Here’s a rundown of just some of the amazing watches in Jay-Z’s collection:

• RICHARD MILE RM011 FELIPE MASSA IN ROSE GOLD worth $260,000

• RICHARD MILLE RM 027 “RAFAEL NADAL” worth $1,500,000

• RICHARD MILLE RM 27-01 “RAFAEL NADAL” worth $1,500,000

• RICHARD MILLE RM 035 BLACK TORO AMERICAS worth $550,000

• RICHARD MILLE RM 056 BLUE SAPPHIRE worth $2,500,000

• RICHARD MILLE RM 56-01 TOURBILLON GREEN SAPPHIRE worth $3,000,000

• PATEK PHILIPPE NAUTILUS TRAVEL TIME REF. 5990/1R worth $114,730

• PATEK PHILIPPE SKY MOON CELESTIAL REF. 6102P worth $345,380

• PATEK PHILIPPE GRANDMASTER CHIME REF. 6300G worth $2,200,000

• TIFFANY BLUE PATEK PHILIPPE NAUTILUS 5711/1A-018 worth $3,220,000

• ROLEX DAY-DATE 41 PLATINUM 218206 worth $70,000

• AUDEMARS PIGUET ROYAL OAK PERPETUAL CALENDAR OPENWORKED CERAMIC worth $400,000

• JACOB & CO. RAINBOW TOURBILLON worth $450,000

And to top that all off he also owns the signature watches that Hublot created as a part of the Shawn Carter Hublot Classic Fusion collection that comes in a yellow gold for $33,900, and a black ceramic for $17,900. The collection was an incredibly limited edition, with only 350 pieces made in total.

It’s hard to even put a price tag on a watch collection like that. Just those (16) watches we mentioned have a combined worth of $21,161,910.

Jay Z's luxury watch collection is worth millions and includes one of the most complicated timepieces ever made

Luxury Car Culture

The rich aren’t like normal people, and that’s especially true when it comes to souping up their already luxury vehicles even more.

My guess is the vast majority of people are familiar with aftermarket car parts from TV shows like Pimp My Ride with host Xzibit, and the earlier movies in the Fast & Furious franchise with stars Vin Diesel and Paul Walker, may he rest in peace.

That’s all well and good if your souping up a Honda S2000, or pimping out an Oldsmobile Cutlass Supreme, but you know you’re super wealthy when you step your game up and begin souping up Rolls-Royces and Lamborghinis

There’s a lot of different ways to slice-and-dice the automotive aftermarket industry, but for our purposes we’ll define it as aftermarket parts used to modify a vehicle from the point that the manufacturer produced it. That aftermarket industry in the U.S. was $205.81 billion dollars in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 4.1% from 2023 to 2030, and is expected to hit $281.98 billion dollars by 2030, according to Grand View Research.

These days the super-rich aren’t necessarily spending the wrench time doing the actual work themselves to customize their vehicles. Increasingly they’re buying them already customized from Dealerships and the Manufacturers themselves.

Among the highly-customized luxury sports cars discerning collectors are purchasing is the  Lamborghini Revuelto Opera Unica, which is the plug-in hybrid supercar with a special hand-applied paint job that took 435 hours to complete. There’s the Rolls-Royce Cullinan SUV that sports mother-of-pearl inlay on a folding tray table that folds down in the back seat. Then there’s the Bugatti Chiron Golden Era, which has a starting retail price of $3 million before you even begin to customize it, but the super-rich now have the option to purchase a custom-decorated gold-painted version of the Chiron with hand-drawn historical scenes of classic Bugattis by the brand’s designers.

The market for these high-end customized rides is small, and comprises a global population of around 400,000 who have at least $30 million dollars in disposable income to spend on a luxury vehicle, but that number is expected to grow to 528,000 people worldwide by 2028.

Like I said, the super-wealth soup up their rides a little differently than some of us used to back in the days of Pimp My Ride and Fast & Furious.

The super-rich are buying more ultra-customized Rolls-Royces and Lamborghinis

Quiet Luxury

One of the biggest trends in fashion in 2023 was “quiet luxury”, and it’s since gone mainstream and begun showing up in discerning investor’s portfolios with out-sized returns.

According to Wikipedia, quiet luxury is defined as “a lifestyle characterized by understated elegance and refined consumption, emphasizing exclusivity and discerning taste without overt displays of wealth. Other terms to describe the same concept include stealth wealth, old money aesthetic, or silent luxury.”

For the longest time the stock of luxury brands have been regarded as an effective hedge against inflation. Now investors are taking this investment thesis a step further and experiencing big returns on their investments as quiet luxury is having its time in the spotlight of pop culture.

Among the brands benefiting from this new quiet luxury trend are Hermes, Prada-owned Miu Miu, Brunello Cucinelli, Compagnie Financière Richemont and Swatch Group. If those are household brands you’re not familiar with, then you’re not part of the 1% (and you’re in good company, because the rest of us 99 percenters can only aspire to the type of wealth one needs to splurge on a $600 Hermes Cavalier en Formes scarf, or a Prada-owned Miu Miu $2,000 dollar Wander Matelassé Nappa leather hobo mini-bag (whatever that is).

Where did the quiet luxury brand come from?

The popular HBO series “Succession” helped to bring the term quiet luxury into most of our vocabularies and boosted its popularity, but it’s been around longer than that. It's one of those things that if you have to ask what it is, you probably can’t afford it. Those in the know have known about “quiet luxury”, sometimes referred to as “stealth wealth” can trace its origins back to around 2013, when a Karine Dubner purchased Los Angeles-based label Brochu Walker and used her experiences working in the French fashion industry to turn Brochu Walker into a conscious luxury brand that supports sustainability efforts. Their line of sweaters, cardigans and dresses are all crafted from ethically-sourced, luxurious fibers, which amplifies the brand's nod toward quiet luxury.

How did we get here?

During the late 2010’s to 2020 time period flashy logos on brands were all the rage. One only has to think of giant Ralph Lauren polo mark printed in full-size on the front of polo shirts to know that understated fashion was desperately needed in the marketplace, and that helped usher in the quiet luxury trend as wealthy consumers gravitated toward products that were make with high-end materials, quality, and craftsmanship. The marketing of these products was understated, subtle, and almost nonchalant in their marketing, which only added to their appeal.

Brands have long differentiated themselves based on the price points they market their products, and quiet luxury brands haven’t been shy about going upmarket in search of more discerning buyers who can afford understated fashion styles.

What hasn’t been understated has been the returns these companies have been posting. Quiet luxury companies in 2023 outperformed their more flashy competitors by 23% percent, translating to a healthy return on investor’s portfolios. The quiet luxury trend seems to have legs and has even seemed to be recession proof as consumers continued to spend in the second half of 2023, helped by the growing upper-middle class of growing countries like China and India.

How 'quiet luxury' is subtly taking over investor portfolios

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So much news, so little time. Until our next issue I’m signing out.

— Chris