We all know that any whiff of interest from uber-investment guru Warren Buffett puts a rocket under any stock, and that many punters follow his every move and thought.
But now, it seems, there are devotees who even want to dress like the Sage of Omaha too. It turns out that the often distinctly- unfashionable looking Buffett has a penchant for Chinese-made suits and doesn’t mind telling the world about it.
As Bloomberg reported on Thursday, Buffett’s enthusiasm for Dalian Dayang Trands turned the suitmaker in the northeast city of Dalian into China’s best-performing clothing stock, after he praised the company’s suits as “wonderful” and said they’re the only ones he wears.
Not only that. In a video made to congratulate Dayang Trands and chairwoman Li Guilian on the company’ s 30th anniversary, Buffett revealed that his business partner Charlie Munger and Microsoft chairman Bill Gates also wear Dayang’s outfits.
“I have to tell you that I now have nine suits all made in China. I threw away the rest of my suits,” Buffett, 79, says in the video. “It’s been a long time since I got compliments on how I look but since I’m wearing Madam Li’s suits, I get compliments all the time.”
Madam Li was invited by Buffett to this year’s Berkshire Hathaway shareholders meeting in Omaha, where he wore only Dayang tailor-made suits.
Buffett recorded the video at Li’s request, notes Bloomberg, quoting a Buffett spokeswoman saying: “It was something they asked him to do and he agreed”.
Always one with an eye for a bargain, Buffett is also showing a great deal of discernment in his preference for Dayang’s offerings – astronomically expensive by Chinese standards. He could easily get a tailor-made suit in China for $100. But even Dayan’s off-the-peg suits start at around 6,800 yuan, or about $1,000, while tailor-made suits run up to three or four times that amount, depending on their cloth and design.
According to its website, Madame Li founded Dayang in September 1979 with 85 employees. The company now has around 20 stores in China, 6,800 workers and derives about 40 per cent of sales from the US and Europe. And, adds Bloomberg, it even hired Ivan Cattarin, a former designer at Armani, to become its chief designer.
Not surprisingly, Dayang rose by the daily 10 per cent limit for a fourth day in Shanghai trading after it posted the Buffett video on its website. A bit like the rush on H&M dresses when Kate Moss appears in one of their cheap and cheerful off-the-peg numbers.
Overall, shares in Dayang – which posted 2008 sales of Rmb894.6m ($131m) and has a market value of less than $350m, are up 261 per cent this year – adds Bloomberg.
But incredibly, the company, doesn’t have any “disclosable business relationship” with Buffett, it said on Wednesday.
Investors are rushing the stock because “Buffett has a lot of influence on the stock market and so when Dalian Dayang shows him wearing their suits, that has an impact,” Kong Jun, an analyst at China Jianyin Investment Securities, told Bloomberg.
So if you want to dress like some of the world’s richest men, then see Dayan’s menswear range here.
Related links:
Warren Buffett suits up – and a Chinese stock soars – Everything Warren Buffett
The Buffett effect (Buffett and Moody’s) – FT Alphaville