By  on February 27, 2019

MILAN — Ahead of the release of year-end financial results of brands including Prada and Moncler, HSBC issued a report called “Too Bling to Fail,” stating that “large groups outperform independent ones with very few exceptions.” The banking institution sees scale as an ongoing competitive advantage and merger and acquisitions as collateral. In tune with this view, HSBC downgraded Prada and Moncler’s rating to “hold” and maintained “reduce” on Salvatore Ferragamo and Tod’s, preferring giants such as LVMH Moët Hennessy Louis Vuitton, Kering and Compagnie Financière Richemont.

Erwan Rambourg and Antoine Belge at HSBC believe that the publication of Prada’s results, to be released on March 12, is “unlikely to act as a catalyst” and that Prada is impacted by the “big outpaces small” 2019 issue. HSBC pointed to Prada’s “late” digital transformation, compared to Louis Vuitton and Gucci, which “invested heavily and outperformed peers by a wide margin” in 2017 and 2018.

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