French Fancies: LVMH

I may have recently covered Louis Vuitton but the story isn’t complete unless I also go into the change of ownership and subsequent development of holding company LVMH.

How it all began

In 1984, Bernard Arnault learned that Christian Dior was for sale. Its parent company Boussac had filed for bankruptcy and the French government was looking for a buyer for the ailing textile empire that owned a number of companies, including Paris-based fashion house Dior. As the story goes, the then-35-year old Arnault – who had spent the previous 10 years heading up the construction firm founded by his grandfather – took US$15 million from his family, combined it with US$45 million from French financial institution Lazard Frères, and purchased Boussac in a quest to get his hands on the famed French fashion house.

In December 1989, within two years of acquiring Boussac, Arnault had pushed the company into the black, laying off 9,000 workers and selling off its disposable-diaper division and most of its textile operations for US$500 million. While that deal helped Arnault to leapfrog from his family’s US$15 million-a-year business to a company 20 times as large, and earned him the title of a force to reckon with in French business, more acquisitions were to follow, including his 1990 spree to gain control of Louis Vuitton Moet Hennessey, the merged fashion house and spirits company, in which Arnault first invested in the late 1980s.

Since then, Arnault – now among the richest men in the world, according to Bloomberg’s running “Billionaires” list – has spent billions of dollars and worked doggedly to amass no less than 70 luxury brands under the umbrella of the group that is now coined LVMH (Louis Vuitton Moet Hennessey).

Bernard Arnault, Président-directeur général de LVMH

Reflecting on his idea to put so many luxury brands — including those competing with each other — under one roof, Arnault said:

In the 90s, I had the idea of a luxury group and at the time I was very much criticised for it. I remember people telling me it doesn’t make sense to put together so many brands. And it was a success … And now, every competitor is trying to imitate, which is very rewarding for us.

Here is a look at the timeline behind the building of the world’s most valuable luxury goods conglomerate.

(Please note: the following is in no way an exhaustive list of the acquisitions and entities that exist in relation to LVMH, and instead, focuses exclusively on fashion and a few beauty and jewellry-related entities.)

1987: Louis Vuitton – Founded in France in 1854, Louis Vuitton became part of LVMH in 1987 when the conglomerate was created. Moët et Chandon and Hennessy, leading manufacturers of champagne and cognac, merged respectively with Louis Vuitton to form the luxury goods conglomerate.

1988: Givenchy – Founded in 1952, Givenchy, a couture and ready-to-wear brand, has been part of the LVMH Group since 1988.

1993: Berluti – Founded in 1895 by Italian Alessandro Berluti, the men’s shoes, leather goods, and men’s ready-to-wear brand was acquired by LVMH in 1993.

1993: Kenzo – Founded in 1970, the womenswear and menswear brand was acquired by LVMH in 1993.

1994: Guerlain – The French perfume, cosmetics, and skincare brand, which is among the oldest in the world, was owned and managed by members of Guerlain family from its inception in 1828 to 1994, at which point it was acquired by LVMH.

1996: Céline – Founded in 1945, the Paris-based brand offers ready-to-wear items, leather goods, shoes and accessories. In 1987, Arnault bought into Céline’s capital, but it was only in 1996 that the brand was integrated into the LVMH Group.

1996: Loewe – The Spanish company created in 1846 was acquired by LVMH in 1996. Originally specialising in very high-quality leather work, today, Loewe offers leather goods and ready-to-wear.

1997: Marc Jacobs – LVMH has held a majority stake in the New York-based brand, which was founded in 1984, since 1997. Marc Jacobs, himself, became the creative director of womenswear for Louis Vuitton in 1997, staying until 2013, when he left to focus on his eponymous label.

1997: Sephora – The French cosmetics chain, which was founded in 1969, was brought under the LVMH umbrella in July 1997, and has since been expanded globally.

1999: Thomas Pink – Founded in 1984 and acquired by LVMH in 1999, Thomas Pink is a recognised specialist in high-end shirts in the UK.  LVMH is understood to have acquired two-thirds of the company from Thomas Pink’s owner, the Irish Mullen family.

1999: Tag Heuer – The Swiss company, which was founded in 1860, sold a 50.1% stake to LVMH in 1999.

1999: Gucci Group – In January 1999,  LVMH acquired a 5% so-called “passive” stake in Gucci, increased three weeks later to 34.4%. In September 1999, Kering acquired the majority stake from LVMH.

2000: Emilio Pucci – The Italian company, which was founded in Florence in 1947, was acquired by LVMH in two tranches, two-thirds in 2000 and the remainder in 2001.

2000: Rossimoda – The Italian fashion company was founded in 1977. LVMH took a minority stake in the company in 2000 and at a later date, acquired sole ownership.

2001: La Samaritaine – LVMH acquired acquired a 55% stake in the iconic French department store La Samaritaine (and its real estate) in 2001, increasing to 100% in 2010.

2001: Fendi – The Italian company, which was founded in Rome in 1925, has been part of the LVMH Group since 2000.

2001: Hermès – In 2001, LVMH acquired an initial stake in Hermès of 4.9% through subsidiaries, and continued to accumulate shares in its Paris-based rival by buying equity derivatives through financial intermediaries and subsidiaries, with each one keeping holdings below 5%. It subsequently built that stake up to 23.1% as of 2013 but was forced to divest it by the French financial services watchdog, Autorité des marchés financiers, in 2015.

2010: Moynat – Groupe Arnault, LVMH’s CEO Bernard Arnault’s holding company bought Moynat, 9th-century trunk-maker five years older than Louis Vuitton.

2011: Bulgari – Founded in 1884, the Italian jewelry brand was acquired by LVMH in an all-share deal.

2013: Loro Piana – LVMH acquired an 80% stake in the Italian luxury textile and ready-to-wear company, which was founded in 1924, in December 2013.

2013: J.W. Anderson – In addition to announcing that Jonathan Anderson would take the helm of Loewe, LVMH acquired a minority stake in Anderson’s eponymous J.W. Anderson label for an undisclosed sum.

2015: Repossi – LVMH acquired a 41.7% stake in the family-run Italian jewellry brand in November 2015. It upped its stake in Repossi to 69% in 2019.

2016: Rimowa – LVMH acquired in October 2016 an 80% stake in the German luggage company, which was founded in 1989.

2017: Christian Dior – LVMH technically acquired the Paris-based couture house in 2017. Prior to that deal, Groupe Arnault, which is the private holding company owned and controlled by Bernard Arnault, was the only declared major shareholder in Christian Dior S.A.

2018: Jean Patou – LVMH bought a majority stake in Jean Patou, a French couture label that it says it will revive by relaunching its ready-to-wear clothing collections. LVMH bought the controlling stake from Britain’s Designer Parfums Ltd.

2019: Stella McCartney – LVMH entered into a “joint venture” with Stella McCartney as the brand ended its longstanding joint venture with rival conglomerate Kering.

2020: Tiffany & Co. – LVMH acquired the company after a protracted battle.

2021: Phoebe Philo – In conjunction with an announcement that former Celine creative director Phoebe Philo will launch her own label, LVMH revealed that it has taken a minority stake in soon-to-launch label.

2021: Off-White – LVMH announced that it would take a 60% stake in Virgil Abloh’s brand Off-White.

2021: Officine Universelle Buly 1803   Nearly four years after LVMH first invested in the company by way of its LVMH Luxury Ventures investment fund, the group has acquired the Officine Universelle Buly 1803.

2022: Pedemonte – LVMH acquired the relatively young fine jewellry group from the Equinox III SLP SIF investmentFund.

2022: Results – LVMH recorded revenue of €79.2 billion in 2022 and profit from recurring operations of €21.1 billion, both up 23%, all business groups achieved significant organic revenue growth over the prior year.

2023: LVMHhas become the first European company to hit a US$500bn (£400bn) market value thanks to booming demand among the rich for its high-end brands. The new valuation puts the stake held by its chair and chief executive, Bernard Arnault, at US$212bn – cementing his position as the world’s richest person, $47bn ahead of Tesla’s chief executive, Elon Musk, in second place.

What next? –The world’s leading luxury group is reportedly considering a takeover of Switzerland-based luxury goods holding company Richemont. Arnault reportedly has his target on Cartier, seeing the Richemont jewellry and watch brand as a key to LVMH’s growing jewelry segment – watch this space……….

 

 

16 Comments on “French Fancies: LVMH

  1. One of the great names of my belle France! I had the pleasure to handle their account personally while taking care of all their worldwide training sessions at the le Grand Intercontinental hotel Paris !! Nice memories thanks nice post again!

    Liked by 2 people

  2. Pingback: The House(s) of Givency – View from the Back

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