The time horizon is not decisive. What matters is that, in the last few seasons, luxury has thrown itself into a billion-dollar challenge. We are talking a lot of billions. The challenge is (apparently) to those who acquire more. The last LVMH operation, in this sense, is an explosive icing on the cake. Not only does Tiffany found itself making the news again. Because there have been several billion dollars acquisitions, in recent times. Here are the most significant. With a couple of hypotheses perhaps not even too absurd.
The wolf in the cashmere coat
According to The New York Times in French circles of businessmen they call him: “The wolf in the cashmere coat”. It is Bernard Arnault, owner of LVMH, the protagonist (he and his group) of the most ground breaking financial operations of the year. The French giant, in 2019, not only decided to invest 16.2 billion dollars to acquire Tiffany. They also acquired Belmond, a group specialising in hotels and travel (by train and ship) of the highest range. The USA group is the owner of the Cipriani Hotel in Venice and Caruso in Ravello. But of Hotel Splendido in Portofino and Villa San Michele in Fiesole, too. Belmond also owns Orient Express trains and LVMH put $ 3.2 billion on the table to buy it. With those invested for Tiffany, we are almost at 20 billion dollars. The French have scored over 100 mergers since 2010. Among them, we also include the (let’s say) internal one that redefined Christian Dior’s structure in 2017. Value: 6.5 billion euros. Small detail: he has (almost) always been right.
They are two. On the one hand, there is Coach who pays 2.4 billion dollars in 2017 for Kate Spade. Two years earlier they invested 574 million dollars to acquire Stuart Weitzman. The group changed its name and became Tapestry. Today, however, the purchase of Kate Spade seems to have become a boomerang.
On the other hand is Capri Holdings, which took this name after Michael Kors bought Versace. It happened in 2018. Investment: 2.2 billion dollars. Added to 1.2 billion dollars in 2017 for the acquisition of Jimmy Choo.
The year is 2018. The nationality is Swiss. The expenditure amounts to 2.8 billion euros. Richemont purchased the Yoox Net-a-Porter e-commerce portal. Objective, as Reuters explains: “To compete more effectively in an ever expanding online market in the field of luxury goods”.
There could be many other cases and examples. We stop here, opening a parenthesis on the near future. The next billion dollars acquisition, in fact, could be happening very soon. It is that of Dr. Martens, tempting very much the American fund Carlyle. According to rumours, Carlyle is going to sell Venetian sneakers brand Golden Goose to buy the British footwear brand. In doing so, it aims to break even. In other words, collect one billion for Golden Goose and spend it for Dr. Martens.
Science fiction (but not too much)
Finally, there is science fiction. For months, between 2018 and 2019, the rumour that CHANEL was for sale has been around. Brothers Alain and Gérard Wertheimer, owner of the Parisian brand, – very hot second rumours – may not exclude the sale. But the basis of negotiations could be colossal: 50 billion euros. The brand has been denying it on several occasions, and is in turn committed to supply chain shopping. For example, they bought their Tuscan supplier of printed leathers: Conceria Samanta.