Short Stories: Luxury Goods

Yesterday, Louis Vuitton Moet Hennessy [LVMH.L](LVMUY.PK) announced earnings, and as you can see from this graph, prior to the announcement, there was a small increase in the percentage of its shares outstanding on loan. Aside the spike in the short interest, which is a dividend arbitrage trade, it was up from 4% in November to just under 6% now. This is in line with a fall in share price, which down from 70EUR in August of last year, to 40EUR now. Utilisation is at 35%. In mid-January there were 4M shares traded on average, as opposed to the six-month average of 2M. Over the last six months, The Lendable Quantity has decreased significantly from 57M to 20M.

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In Italy, Bulgari Spa [BUL.MI](BULIF.PK), has a higher amount of its SOOL, at just under 8%, up from 5.5% in early January. Like LVMH, Bulgari has seen a drop in the share price, down from 7EUR to 3EUR in the last six months. Utilisation is at 35%. on Friday there were 7.7M shares traded compared to the six-monthly average of 2.5M.

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The Movado Group (MOV) has also seen a recent uptick in short interest, from 3.&% SOOL in late December to 5% now, but is down from 7% in September. Movado, who makes, among other durables, watches and jewelery, has seen a fall in its share price. It is down from $25 in August 2008 to $7 now. Utilisation is at 19%.

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The consumer fashion accessory company Fossil Inc. (FOSL), has just 2% SOOL, which is down dramatically from 15%, just six months ago. Investors have continued to take profits over the last half of 2008 as the price fell, from $30 in August 2008 to just over $10 now. Utilisation is at 8%.

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Dislclosure: None