Gaucho Holdings Has A Big Dream — What Is The Brand Planning To Do To Make It Real?

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Luxury goods manufacturer and provider of luxury experiences Gaucho Group Holdings Inc. VINO says it is dreaming big. The Miami-based company wants to become the LVMH Moët Hennessy Louis Vuitton SA LVMUY of South America.

LVMH is a Paris-based conglomerate specializing in luxury goods with brands such as Tiffany & Co. and Dior as well as Louis Vuitton and Hennessy cognac. 

LVMH has a market capitalization of $347 billion and owns 75 brands at the time of this writing. Gaucho has a market capitalization of approximately $25 million.

Whereas LVMH annual revenue totaled 64.2 billion euros in 2021, or approximately $70 billion, Gaucho revenue for the year was $4.9 million.

Resort Lots To Drive Revenue?

Most of that revenue, a significant increase on 2020 figures for Gaucho, stemmed from increased residential lot sales at the company’s luxury resort in Mendoza, Argentina. And it is those lot sales, and the development of the resort as a whole, on which Gaucho is adding to its hopes to help build its brand along with its extensive e-commerce presence in luxury goods and fine wine, as well as other projects.

Gaucho reports that the 4,138 acre San Rafael based Algodon Wine Estates site has the capacity for up to 550 lots of luxury housing amid vines and a golf course with mountain views. Prices range from $200,000 to $785,000, offering potential accommodation in wine country that the company says is unattainable at that value in other famous wine-producing regions of the world like Tuscany and Napa Valley, California.

The company is seeking to sell eight lots per quarter.

The development of the housing part of the resort comes as Gaucho moves ahead with its plans to develop the resort as a whole with the centerpiece being an 80-room luxury hotel containing approximately 40 additional residences. Gaucho hopes to produce an additional $25 million of revenue annually from the hotel and residences development.

Gaucho is planning to partner with a major hospitality group on the hotel project. Marriott International Inc. MAR is among the hotel groups operating in the Mendoza region.

As the world emerges from the global pandemic — a period when Gaucho has made significant upgrades at the Mendoza estate — Gaucho is hoping potential residents seeking rural tranquility will choose its estate over other more-expensive wine regions to buy property.

Buyers could be drawn by the reality of the devalued Argentinian peso, which offers highly favorable rates for people who usually deal in the dollar or the euro. For example, a dollar buys approximately 115 pesos at today’s value and has strengthened consistently over the past five years when it was worth about 15 pesos as of April 2017.

With COVID-19 potentially in retreat, together with a weak peso, it could be that Gaucho’s bet on its accommodation lots at its Mendoza estate push it a little closer to the LVMH dream.

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Image provided by Gaucho