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Gucci joins peers in defying China fears

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Luxury goods group Kering joined competitors in defying concerns of waning demand in China, as momentum at its powerhouse Gucci slowed slightly in the fourth quarter but still outperformed most other fashion brands.

Like its peers, Paris-based Kering, which also owns Saint Laurent and Balenciaga, has been under scrutiny over whether demand among Chinese shoppers, who account for over a third of industry sales, can hold up.

The firm’s comparable sales rose a higher-than-expected 24.2 percent in the October to December period, when stripping out currency swings and acquisitions, and were up 24.5 percent on a reported basis to 3.8 billion euros ($4.29 billion).

“Sales among our Chinese clientele remained very dynamic in the fourth quarter, even with a high comparative base,” Financial Director Jean-Marc Duplaix told journalists on Tuesday, adding that spending by these customers had shifted from overseas to mainland China.

The group’s Italian label Gucci held on to its crown as one of the luxury world’s fastest-growing brands. Comparable sales growth of 28.1 percent in the fourth quarter marked a slowdown from the previous three months but far exceeded that of rivals, while margins reached a record 39.5 percent in 2018.

Gucci’s might – with annual sales of 8.3 billion euros putting it neck and neck with privately-owned Chanel behind LVMH’s Louis Vuitton as the top luxury label by sales – has raised questions about Kering’s reliance on the label.

It accounted for over 80 percent of the group’s operating income in 2018.

Gucci has also been in the spotlight over a tax investigation in Italy, where Kering faces a potential 1.4 billion euro bill for allegedly avoiding tax on earnings generated by the Italian label and billed to a Swiss subsidiary.

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Peru’s ex-president Garcia dies after shooting himself to avoid arrest

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The former president of Peru, Alan Garcia, speaks during the First International Meeting of the Pacific Basin, in Cali, Colombia, on October 5, 2011.

Luis Robayo | AFP | Getty Images

The former president of Peru, Alan Garcia, speaks during the First International Meeting of the Pacific Basin, in Cali, Colombia, on October 5, 2011.

Peru’s former president Alan Garcia died in a hospital in Lima on Wednesday, hours after shooting himself in the head to avoid arrest in connection with a bribery probe, authorities said on Wednesday.

Garcia was 69.

A skilled orator elected president twice, first as a firebrand leftist and then as a champion of foreign investment and free trade, Garcia had been dogged by allegations of corruption in recent years that he repeatedly denied.

Garcia had been one of nine people a judge had ordered to be arrested on Wednesday for alleged involvement in bribes distributed by Odebrecht, a Brazilian construction company that triggered Latin America’s biggest graft scandal when it admitted in 2016 that it had paid kickbacks to politicians across the region to secure lucrative contracts.

Members of his party announced his death to crowds gathered outside of hospital Casimiro Ulloa, where he suffered three cardiac arrests and underwent emergency surgery.

President Martin Vizcarra said on Twitter that he was “consternated” by Garcia’s death, and sent his condolences to his family members.

Garcia governed as a nationalist from 1985 to 1990 before remaking himself as a free-market proponent and winning another five-year term in 2006.

He had denied wrongdoing involving Odebrecht, and blamed his legal troubles on political persecution.

“Others might sell out, not me,” Garcia said in broadcast comments on Tuesday, repeating a phrase he has used frequently as his political foes became ensnared in the Odebrecht investigation.

Interior Minister Carlos Moran said at a news conference before Garcia died that the former president had told police he needed to call his attorney after they arrived at his home in Lima to arrest him.

“He entered his room and closed the door behind him,” Moran said. “Within a few minutes, a shot from a firearm was heard, and police forcibly entered the room and found Mr. Garcia sitting with a wound in his head.”

Last year, Garcia asked Uruguay for political asylum after he was banned from leaving the country to keep him from fleeing or obstructing the investigation. Uruguay rejected the request.

Garcia would have been the third former president in Peru to have been jailed in the Odebrecht case. Ollanta Humala spent nine months in pre-trial detention in 2017-2018 and Pedro Pablo Kuczynski was arrested without charges last week.

A fourth former president, Alejandro Toledo, is fighting extradition from California after a judge in Peru ordered him jailed for 18 months in connection with Odebrecht in 2017.

All have denied wrongdoing in connection with Odebrecht.

In Peru, criminal suspects can be ordered to spend up to three years in jail before trial if prosecutors can show they have evidence that likely would lead to a conviction and the suspect would likely flee or try to interfere in the investigation.

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India’s Jet Airways suspends operations after banks reject funds plea

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Embattled Jet Airways said on Wednesday it was halting all flight operations after its lenders rejected its plea for emergency funds, potentially bringing the curtains down on what was once India’s largest private airline.

The carrier, saddled with roughly $1.2 billion of bank debt, has been teetering for weeks after failing to receive a stop-gap loan of about $217 million from its lenders, as part of a rescue deal agreed in late March.

“The airline has been left with no other choice today but to go ahead with a temporary suspension of flight operations,” the company said in a two-page statement late on Wednesday.

At its peak, Jet operated over 120 planes and well over 600 daily flights. The airline, which has roughly 16,000 employees, has in recent weeks been forced to cancel hundreds of flights and to halt all flights to overseas destinations, as funds have dried up.

Intense competition from low-cost carriers, like Interglobe-owned IndiGo and SpiceJet, together with higher oil prices, hefty fuel taxes and a weak rupee have piled pressure on the airline in recent months.

In its statement on Wednesday, the airline thanked its loyal customers for their patronage and support over 25 years and said it “sincerely and profusely apologizes for the disruption to the travel plans of all its guests.”

The airline said it would continue to work with its lenders, who are trying to identify an investor willing to buy a majority stake in the airline and attempt to turn it around.

Jet Airways said it would continue to support the bid process initiated by the banks and that it hopes to resume flying soon. Its lenders, led by State Bank of India (SBI), have been seeking expressions of interest for an up to 75 percent stake in the airline. Initial expressions bids were submitted last week.

Jet Airways, in its statement, said it had been informed late on Tuesday night by its lenders that they were unable to consider its request for critical interim funding.

“Since no emergency funding from the lenders or any other source is forthcoming, the airline will not be able to pay for fuel or other critical services to keep the operations going,” the airline said.

Two sources at state-run banks told Reuters that the banks had rejected a request for 4 billion rupees ($58 million) from Jet to keep itself temporarily afloat.

“Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding,” said one of the bank sources directly involved in Jet’s debt resolution process.

The sources declined to be named as they were not authorized to discuss the matter with the media. SBI did not immediately respond to a request for comment.

The crisis at Jet, which owes vast sums to suppliers, pilots lessors and oil companies, has deepened in recent weeks as its lessors have scrambled to de-register and take back planes, in a sign the bank rescue plan had failed to assuage their concerns.

India’s aviation regulator said on its website on Wednesday that lessors had applied to de-register another four Boeing Co 737 planes.

An analysis of the latest data disclosed by India’s Directorate General of Civil Aviation shows that Jet’s lessors have, so far, sought to deregister and repossess at least 48 planes operated by Jet. Once deregistered, lessors are free to reclaim a plane and lease it to another airline.

The rapid exodus of planes risks further eroding value from the carrier, even as lenders scurry to find an investor willing to buy a majority stake in the airline.

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Bugatti marks 110-year anniversary with 110 ans Bugatti hypercar

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Under the hood, power is unchanged from the 1,500-horsepower, 8.0-liter, quad-turbocharged W-16 engine in the Chiron. The Sport edition adds on some handling improvements and lightens the car even further, with engineers removing 40 pounds by making things like the windshield wiper arms out of carbon fiber.

But perhaps the most surprising thing about the 110 ans Bugatti is what Bugatti isn’t disclosing. The car’s predecessor, the Bugatti Veyron, shattered the production vehicle top speed record in 2005 by going 254 mph. When it lost the speed crown, Bugatti launched the Veyron Super Sport which did 268 mph.

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