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Christian Billinger

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53

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2024-07-12

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2024-07-12

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1. “Product or experience is that these tend to be product or services that cannot easily or cannot be compared to any other product or service, right? So they have a real identity as opposed to a positioning in the market. And therefore, it's often more difficult to define the competitive set and the true competitive set would often be much broader than for most other consumer goods businesses you look at. So singularity is one word I would keep in mind. And then I think in terms of how these businesses are run, one of the sort of main lessons I've taken from looking at these companies is that they tend to do the right thing most of the time at least. So they seem to have a very long time frame. They invest up front. Now these are generalizations, but generally speaking, they care about product quality, even in situations or even when looking at aspects of a product or service that the customer may not be willing to pay a premium for. So there's a real”

   2024-07-12 · We Study Billionaires · TIP643: The Luxury Strategy w/ Christian Billinger · IDENTIFIED FROM THE TRANSCRIPT

2. “So there are so many ways of defining it, and it depends on which point of view you take. Are you trying to define this as a consumer or as an operator? But I think for the purposes of this conversation, I think the most meaningful way to define it is as an investor. And I think in some ways you could argue, what does it matter whether you call it a luxury business or a premium business or a fast-moving consumer goods business? But I think it does matter because it has a real impact on how durable the competitive advantage of the business is and what the metrics look like and how you should think about sustainably high returns on capital, et cetera. So I think it does matter whether a business actually operates as a true luxury business or not. So there's a few things that I would look at to get a sense of whether we're looking at a true luxury business. Possibly the most crucial one is, are we looking at what I would call a singular product or experience? And I think we'll get back to the comparison between luxury and premium, et cetera. But the idea of a singular”

   2024-07-12 · We Study Billionaires · TIP643: The Luxury Strategy w/ Christian Billinger · IDENTIFIED FROM THE TRANSCRIPT

3. “Sure, delighted to and excited to have this conversation about the sector and the book specifically. So I've been investing European equities for 20 years now. So my experience is as an investor, not as an operator, but I've looked at the large European conglomerates, which tend to be French. So LVMH, Hermes, and we've been invested in those two for a number of years. We've also been invested in Remy, Quantro, for a few years, which, although formally speaking, is a spirits business. Much of their revenues and even more of their earnings generate from or derive from sales of what you would consider a true luxury product. So I've looked at the space for a number of years, and I think being based in Europe and being sort of predominantly focused on European equities, as you alluded to, that's been one of the best sort of corners of the European market to be generating returns in for the last decade plus. So that's my experience as an investor.”

   2024-07-12 · We Study Billionaires · TIP643: The Luxury Strategy w/ Christian Billinger · IDENTIFIED FROM THE TRANSCRIPT