Sotheby's Initiates $500 Million Bond Sale Backed by Art

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Welcome to the 33rd edition of the Maximalist! Dive into the ultimate guide, filled with insider insights into the world of fashion, art, real estate, travel, jewelry, and horology.

The world of luxury is never boring, and this week is no exception. Let’s dive in!

Markets

On this week’s agenda:

1. Sotheby's Initiates $500 Million Bond Sale Backed by Art

2. Hermès Introduces Innovative Women's Watch Line

3. Remembering Roberto Cavalli

4. Kering Acquires Historic Milan Property for $1.4 Billion

5. Rimowa x La Marzocco

6. Manhattan’s Luxury Real Estate Market Experiences Slow Spring Start

7. Auction of Princess Diana's Wardrobe to Be Held This Summer

8. Bark Air Launches Luxury Airline Exclusively for Dogs

Sotheby's Initiates $500 Million Bond Sale Backed by Art

Sotheby's, the prominent auction house owned by Patrick Drahi, is set to raise approximately $500 million through a novel bond offering. This bond, which is backed by art and other collectibles and secured by personal loans to art collectors, represents a unique approach in the financial market.

Barclays Plc is spearheading the structuring of this asset-backed security, with plans to commence premarketing as early as this Wednesday. BNP Paribas SA and Morgan Stanley are also playing significant roles as joint leads in this transaction, according to a company disclosure.

This initiative marks the first time an auction house has introduced such an ABS-style product to the public market. The decision to launch this bond, initially delayed by disruptions in the credit markets due to the US regional banking crisis, comes after more than a year of planning and discussions with investors.

The auction house, established in 1744, provides various financial services, including secured loans against art collections, encompassing fine art, decorative art, and jewelry. These loans typically take the form of term loans or short-term advances against clients' consignments with Sotheby's.

The move by Sotheby's into asset-backed securities comes as Patrick Drahi, who acquired the auction house in 2019, continues to expand his holdings. Drahi also owns Altice France SA, a telecommunications company that has recently faced credit rating cuts.

This bond issuance by Sotheby's not only diversifies its financial strategies but also taps into the increasing interest in niche types of securitizations, which have seen a significant uptick in issuance, reaching the highest levels since at least 2016.

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Hermès Introduces Innovative Women's Watch Line

Hermès has launched its most significant new women’s watch line in over a decade, the Hermès Cut, during the Watches and Wonders event in Geneva. Aimed at mainstream consumers, this line introduces in-house movement into Hermès' offerings and features a sporty daily wear design, filling a previous gap in their product range. This initiative mirrors the success of their 2021 men’s sports watch, the H08, which marked Hermès’ first major breakthrough into the men’s watch market.

Laurent Dordet, the CEO of Hermès Horloger, expressed that historically, women formed the majority of their watch clientele, but recent trends show a more balanced demographic with men. The Hermès Cut features four variations, including options in steel or a two-tone steel and rose gold blend, some adorned with 56 natural diamonds.

The introduction of the Hermès Cut is part of a broader strategy to solidify the brand’s commitment to high-end mechanical watchmaking. Despite the luxury brand's diverse product lines, watches have become a significant part of Hermès' growth, as evidenced by a 23.2 percent increase in sales in 2023 alone, surpassing their perfume and beauty segments.

Hermès' innovative approach to watchmaking focuses on chic, understated designs that align with its traditional ethos but still stand out in the luxury market. With fewer than 80,000 watches produced annually, the brand sees significant growth potential, particularly through its expanded distribution networks and larger retail spaces, such as the recently renovated store in Kuala Lumpur.

Looking forward, Hermès aims to climb the ranks among Swiss watchmakers, potentially breaking into the top 10 in terms of sales. With consistent growth and a strong brand identity, industry experts like Oliver Müller from LuxeConsult see this ambitious goal as challenging yet feasible within the next decade.

Remembering Roberto Cavalli

Roberto Cavalli, a pioneering figure in the fashion industry, passed away on April 12, 2024. Born into a family enriched with artistic roots in Florence on November 15, 1940, Cavalli was destined for creativity. His journey in fashion began with a deep appreciation for art, which he studied at the Istituto d’Arte. By the 1960s, his unique designs had caught the attention of high-profile brands like Pierre Cardin and Hermès.

In 1970, Cavalli made a significant breakthrough by inventing a technique for printing on leather and suede, setting the stage for his debut collection at Paris' Salon du Prêt-à-Porter. His brand quickly expanded, catalyzed by the opening of his boutique in Saint-Tropez in 1972. Cavalli's flair for blending artistic designs with luxurious materials earned him a dedicated following and transformed women's fashion with the introduction of stretch denim in 1993.

Cavalli's influence extended beyond clothing. He ventured into children’s apparel and collaborated with high-profile celebrities and brands, contributing to notable events and fashion shows globally. Despite the fluctuating fashion trends through the decades, Cavalli's empire flourished, symbolizing the extravagant spirit of the late 20th and early 21st centuries.

His contributions weren’t limited to his fashion lines. Cavalli also engaged in redefining iconic costumes, such as the Playboy Bunny outfit, and his designs were regularly featured in pop culture, most notably on "Sex and the City."

As Cavalli aged, he gradually stepped back from his brand, which saw leadership transitions through various designers, maintaining his legacy while navigating through financial restructurings. Cavalli’s life was not just about creating art but also about making the statement that excess could indeed mean success. His death marks the end of an era for maximalist luxury, but his influence will continue to inspire fashion enthusiasts around the world. Cavalli is survived by his partner and six children, leaving behind not just a thriving business but a profound impact on the fashion industry.

Kering Acquires Historic Milan Property for $1.4 Billion

In a significant move in the luxury retail world, Kering SA, the French conglomerate that owns Gucci, has made a record-breaking acquisition, purchasing a 53,820 square feet property on Milan's prestigious Via Monte Napoleone for €1.3 billion ($1.41 billion). This purchase marks the most expensive real estate transaction in Italy to date.

The property, dating back to the 18th century, spans five floors and covers over 5,000 square meters of luxurious retail space. Its strategic location on Milan’s most famed shopping avenue strengthens Kering's presence in the luxury market, housing high-end establishments like the Italian café Cova (part of LVMH Group) and the fashion powerhouse Prada.

Via Monte Napoleone is celebrated globally as a luxury hub, lined with elite boutiques, jewelry stores, and upscale shoe shops. Kering's new flagship store will further boost this area's reputation as a top destination for luxury shopping.

Luigi Caruso from Blackstone in London highlighted this deal as Italy's largest real estate asset sale. This acquisition follows Kering’s recent venture into luxury real estate with a significant purchase on New York’s Fifth Avenue, underscoring its aggressive expansion strategy.

Jean-Marc Duplaix, Kering's Deputy CEO, and Francois-Henri Pinault, the CEO, underscored the importance of securing prime real estate to support their luxury brands, specifically Gucci. The company aims to enhance its brand value through strategic location acquisitions, focusing on top-tier properties in key cities without delving into property development.

This move confirms Kering’s commitment to elevating its portfolio and asserts its influence in the luxury retail sector, promising a new era of grandeur on Milan’s iconic shopping street.

Rimowa x La Marzocco

Rimowa has teamed up with Italian coffee machine maker La Marzocco to introduce a new espresso machine that merges Rimowa's iconic design with La Marzocco's renowned craftsmanship. The collaboration has resulted in a unique espresso machine modeled after La Marzocco's Linea Mini.

This machine combines advanced brewing technology with aesthetic touches reminiscent of Rimowa's famous 1930s aluminum suitcases. Notable features include a brew-by-weight scale, a built-in shot timer, and a two-valve pre-infusion system, catering to both expert baristas and novices. The machine showcases Rimowa’s signature aluminum grooves across its stainless-steel body, enhancing its visual appeal with details like aluminum knobs bearing the logos of both brands.

Each unit requires 40 hours of handcrafting in La Marzocco’s Florence workshop and will be available for pre-order starting April 15. Pricing details were not disclosed, but it's noted that the standard Linea Mini begins at $5,900. Additionally, to celebrate this partnership, a pop-up café named Caffè Rimowa will operate during Milan’s Salone del Mobile from April 15 to 21, featuring espresso from the bespoke machine.

Manhattan’s Luxury Real Estate Market Experiences Slow Spring Start

The Manhattan luxury real estate market has begun its spring season with less momentum than expected. Only 18 luxury properties—defined as those priced at $4 million and above—went under contract last week. This represents a 31% decrease from the previous week and the lowest number since early January.

This downturn is stark when compared to the activity in the same week across previous years: 26 contracts were signed in 2023, 41 in 2022, and 47 in 2021. The most significant contract last week was for a penthouse at 1965 Broadway (PH3BC), which sold for just under $16 million, down from its original $20 million listing in 2022. This triplex condo offers six bedrooms, 6.5 bathrooms, nearly 7,000 square feet of living space, and features including two terraces with an outdoor kitchen and a grand 49-foot great room with views of the city and Hudson River.

The second highest contract was for a unit at 10 Madison Square West (11D), with a sale price of $12.5 million. This 3,300-square-foot condo includes four bedrooms, 4.5 bathrooms, and boasts 11-foot ceilings and an 850-square-foot great room that overlooks Madison Square Park. Its amenities include a 60-foot lap pool, a hot tub, and a garden courtyard.

Of the 18 properties that went under contract, 14 were condominiums, two were co-operatives, and two were townhouses. Collectively, these homes had an asking price of $133.3 million, averaging $7.4 million per home, with a median close to $7 million. On average, these properties had been on the market for 803 days and sold at an 8% discount.

This sluggish start underscores a broader cooling in Manhattan's high-end real estate market, signaling potentially larger shifts in buyer behavior and market dynamics as the season progresses.

Auction of Princess Diana's Wardrobe to Be Held This Summer

This summer, Julien's Auctions in Los Angeles will host a significant event featuring the largest collection of Princess Diana's belongings to be auctioned since 1997. The auction, set for June 27, will showcase "Princess Diana's Elegance & a Royal Collection" and is expected to draw global attention both online and in person.

The collection includes a range of Princess Diana's most notable outfits, including evening and cocktail dresses, suits, shoes, hats, and other accessories. One of the standout items is a midnight blue Murray Arbeid gown adorned with tulle and diamante stars, which Diana wore to significant events in 1986. This gown is anticipated to fetch between US$200,000 and US$400,000.

Another highlight is a magenta silk and lace evening dress by Victor Edelstein, expected to command a similar price. This dress is part of Diana's iconic fashion legacy, including the famous blue velvet gown she wore while dancing with John Travolta at the White House.

Additional pieces include a pink floral shirtdress, a Victorian revival gown, and a two-piece yellow and navy skirt suit, all designed by Catherine Walker. These items have estimates ranging from US$30,000 to US$200,000.

The auction will also feature a selection of Diana's elegant accessories, such as Kurt Geiger emerald green satin shoes and a yellow and black felted wool hat by Philip Somerville, expected to attract bids of thousands of dollars.

A portion of the proceeds from the auction will benefit Muscular Dystrophy UK. Additionally, selected items from the collection will be displayed at K11 MUSEA in Hong Kong and the Museum of Style Icons in Newbridge, Ireland, before the auction.

Julien’s Auctions has expressed pride in presenting this historic auction, which not only celebrates Princess Diana's timeless style but also her enduring influence as a fashion icon and humanitarian.

Bark Air Launches Luxury Airline Exclusively for Dogs

Bark, the creators of the BarkBox subscription service, have introduced Bark Air, a pioneering luxury airline designed specifically for dogs. This exclusive airline is truly one-of-a-kind, offering lavish amenities such as beds, lavender-scented refreshment towels, and even canine champagne. Dave Stangle, Bark’s VP of brand marketing, expressed that offering a premium flight service for dogs has been a goal since the company’s inception in 2011, and now it has come to fruition due to the growing demand for dog-friendly travel options.

The airline, which was developed in collaboration with the creative agency Tombras, addresses the significant need for more dog-friendly travel solutions. Dogs have traditionally had to endure less than ideal conditions, either confined under a seat or in the cargo hold. Bark Air seeks to transform this by ensuring each dog enjoys a first-class experience, complete with a belly-rub button at every seat.

Launching its first flights from New York, Los Angeles, and London in May, Bark Air is partnering with Talon Air to handle the operational aspects of flights, while focusing intensely on the safety and comfort of the canine passengers. The service includes a concierge team that tailors each flight to the individual needs of the dogs, taking into account their social preferences and health conditions.

A promotional short film by Tombras showcases these amenities, highlighting features like in-flight squirrel movies and a menu of shoes to chew on. According to Jeff Benjamin from Tombras, the aim is to create a calming, luxurious environment for dogs, which even includes the world's first onboard dog park.

Bark Air is determined to demonstrate the reality of its service amidst skepticism. It promises a sophisticated and enjoyable travel experience for dogs and their owners, albeit at a premium cost. Initially, ticket prices for one dog and one human on routes like New York to Los Angeles start at $6,000, with the aim of making the service more accessible in the future through further investment and innovation.

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