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Anuncio de los artículos posteados el: 13/02/2015

Can Ferrari really cut it in luxury beyond supercars?



By Agnieszka Flak

MILAN Fri Feb 13, 2015 9:12am EST

The new LaFerrari hybrid car is pictured on the Ferrari stand during the first media day of the 83rd Geneva Car Show at the Palexpo Arena in Geneva, in this March 5, 2013 file photo. REUTERS/Denis Balibouse/Files

The new LaFerrari hybrid car is pictured on the Ferrari stand during the first media day of the 83rd Geneva Car Show at the Palexpo Arena in Geneva, in this March 5, 2013 file photo.



Credit: Reuters/Denis Balibouse/Files



MILAN (Reuters) - Ferrari faces a battle to persuade investors that it should be priced as a high-flying luxury goods stock, given a carmaker's margins and the heavy investment required to make its prancing horse logo a big attraction on other exclusive lines.

Few would question the business acumen of Sergio Marchionne, redoubtable chief executive of Fiat Chrysler Automobiles (FCA)(FCHA.MI)(FCAU.N), but his strategy for squeezing every last drop of value from the listing of the group's illustrious Italian sports car brand has certainly raised a few eyebrows.

"Ferrari is capable of being a fully-fledged luxury brand," Marchionne declared last month, setting his stall out to target the kind of high-end valuation multiples enjoyed by the likes of LVMH (LVMH.PA) and Richemont (CFR.VX).

The 62-year-old said Ferrari is worth up to 10 billion euros ($11.3 billion), eyeing an initial public offering (IPO) slated for the first half of this year and hoping for a chunky windfall to boost FCA's own ambitious five-year investment plan.

But for all Ferrari's Formula One racing pedigree, exclusivity exemplified by the LaFerrari supercar's 1 million euro price tag and a production cap that maintains a healthy customer waiting list, the company has its work cut out if it is to join a sector that trades at about 20 times future earnings. That's more than double the average for carmakers.

It has to be acknowledged that Ferrari is no laggard in the money-making stakes, with profit nearly tripling over the past decade and its margins of 14 percent unmatched by any carmaker bar Porsche (VOWG_p.DE).

But those margins are well below Prada's (1913.HK) 26 percent and have been under pressure from rising costs.

Revenue growth has been more gentle than that of most European luxury stocks and its capital expenditure and research and development requirements are more than double, depressing its return on capital.

SHORT ON DETAIL

While the multiples investors will pay depend on Ferrari's ability to grow, it is hard to see what the company has beyond its cars that would fit the luxury mold.

Ferrari has the capacity to raise annual production to 10,000 vehicles a year from 7,000, but Marchionne has made clear that output will be kept below demand to protect the brand's exclusivity and told analysts in a post-results conference call last month that further detail on his strategy would not be forthcoming until nearer the IPO.

Ferrari's merchandising division might seem an obvious starting point, but Marchionne has denied this. In any case, the elevated prices of T-shirts, bags and shoes bearing the prancing horse are well below those commanded by luxury goods.

Its theme park in Abu Dhabi is also accessible to anyone willing to fork out 250 dirham ($70) for a one-day pass.

"If you're already available to everyone, then making your way back up to the luxury level is nearly impossible," said Manfred Abraham at brand-building consultancy BrandCap.

"They would have to stop doing a lot of things and start again, which is a massive investment ... how attractive is that to shareholders?"

Investors have also been left scratching their heads over Marchionne's statement that carmaking, which accounts for the bulk of sales and profit, is "incidental" to Ferrari.



As shown by Porsche Design, tire maker Pirelli's (PECI.MI) PZero and Bugatti's move into apparel, previous attempts by automotive groups to stretch beyond their core products have not provided a major revenue boost.

Then there's the Ferrari logo and colors, which analysts have said make it a difficult sell in the fashion and design world.

LUXURY ALLIANCE?



There was talk of a luxury alliance with other opulent Italian brands to rival conglomerates such as Kering (PRTP.PA), but the concept has been dismissed by two bankers close to the company.

Analysts, meanwhile, have pointed to the potential for exclusive clubs and hotels for the super-rich or Ferrari moving into high-value motorcycles and boats.

However, Bernstein analyst Max Warburton remains skeptical, suggesting that the Ferrari brand could be extended at a luxury premium only to watches, perfumes and eyewear.

"A sports car maker has little competitive advantage when it comes to producing and selling personal luxury goods," he said.

Regardless of its prospects as a true luxury goods business, the spinning off of Ferrari is far from a car crash.

The divorce will unlock the value of a business that made 12 percent of FCA's profit last year. It could also pave the way for FCA to attempt a tie-up with another carmaker, perhaps focusing on the Asian market, bankers have said.

Yet how investors interpret Marchionne's bold statements remains unclear, with analysts' estimates for Ferrari's worth ranging anywhere between 5 billion euros and 10 billion euros.

"With luxury it's a lot about emotion and allure," one U.S. investment banker said. "People may not fully buy into Marchionne's argument, but they will put money on Ferrari on the promise of what it represents and could be."

(Additional reporting by Ed Taylor in Frankfurt; Editing by David Goodman)

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13 Feb. 2015
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'American Sniper' suspect told cop he took 'couple of souls'

STEPHENVILLE, Texas (AP) -- A police officer told a Texas jury Thursday that a former Marine charged in the deaths of two men, including "American Sniper" author Chris Kyle, told him he had "taken a couple of souls" and had more to take.A police video displayed for the jury showed police in Lancaster, near Dallas, trying to coax Eddie Ray Routh from a pickup in the hours after famed Navy SEAL Chris Kyle and his friend Chad Littlefield were found dead at a shooting range in February 2013.Officers in the video are seen trying to talk Routh into surrendering as he makes comments such as, "Anarchy has been killing the world.""He told us he'd taken a couple of souls and he had more souls to take," Lancaster police Lt. Michael Smith testified Thursday.Defense attorneys have said Routh, 27, was insane when Kyle and Littlefield took him to a shooting range to provide support and camaraderie. Routh believed the men planned to kill him, his attorneys say. Routh faces life in prison without parole if convicted.The case has drawn intense interest, largely because of Kyle's memoir, "American Sniper," about serving four tours in Iraq. The Oscar-nominated film based on the book has grossed nearly $300 million.Officers testified that hours after the bodies were discovered, Routh returned to his home in Lancaster, driving Kyle's pickup. Officers spoke with him as he sat in the pickup but he refused to leave the vehicle, eventually speeding off with police in pursuit. He stopped minutes later after one police vehicle rammed the pickup.At one point Routh, wanted his parents to come. "There's no trust anymore," the video showed Routh saying.At different points, Routh made comments such as, "I didn't sleep a wink last night at all," "I don't know if I'm going insane," and "Is this about hell walking on earth right now?"Authorities say Routh had earlier driven his sister's house, admitted to the killings and told his sister, "people were sucking his soul."While two officers tried to talk Routh out of the truck, two others "low crawled" to the back of the vehicle and placed spikes on the back tires, Lancaster police Officer Flavio Salazar said. The spike strips didn't cause the tires to deflate, and Routh sped away, prompting a chase at speeds of about 100 mph.Finally, police rammed the pickup, eventually disabling the vehicle. Police video showed Routh opening the driver's-side door, emerging with his hands up and sinking to the ground.Routh's mother had asked Kyle, whose wartime exploits were depicted in his memoir, to help her son overcome personal troubles that twice led him to be admitted to a psychiatric hospital. Routh had been a small arms technician who served in Iraq and was deployed to earthquake-ravaged Haiti before leaving the Marines in 2010.Prosecutors contend that a history of mental illness should not absolve Routh in the deaths.Texas Ranger Michael Adcock testified earlier Thursday that Kyle and Littlefield were armed at the time of the shootings but it did not appear the weapons they carried were ever removed from their holsters. Their wounds included multiple gunshots to the back.

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13 Feb. 2015
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