Expensive Much? Louis Vuitton Brand to buy Tiffany at A$23.4b

LVMH, the world’s biggest luxury brand is buying the US-based jeweller Tiffany & Co

The largest-ever luxury goods deal is in the works. Louis Vuitton brand will buy Tiffany & Co. by spending 23.4 billion AUD soon. Bernard Arnault, the LVMH’s billionaire has made a move to get a bigger slice of the rapidly growing upmarket sectors. He stated that Tiffany has an unparalleled heritage and that the brand fitted with other brands.

 

Tiffany & Co. is a New York institution that earned global fame when it was featured in the Audrey Hepburn film entitled Breakfast at Tiffany’s. The company was founded in 1837, has a flagship store next to Trump Tower, employs 14,000 people and has 300 stores. The deal finalised by the Louis Vuitton brand will give more power to Arnault to challenge Cartier owner Richmont. The two are competing for dominating the global jewellery business.

Louis Vuitton brand, LVMG has 75 other brands that include Dom Perignon Champagne and Christian Dior Fashion. Intelligence Analysts say that with the acquisition of Tiffany, the brand’s jewellery scale will double and it will have 18 per cent share in jewellery sector.

 

The acquisition of Tiffany by Louis Vuitton brand is expected to be an all-cash deal that will probably close in the middle of 2020. Both the brands have got a boost since the news of this deal was hinted at last month. After the confirmation of the deal, Tiffany & Co.’s shares have risen 6 per cent during the pre-market trading in New York. Even LMVH shares rose by 2 per cent and approached a record during the morning trading in Paris.

This deal is another feather on the cap for Arnault’s firm that is worth €200 billion. It isn’t the first big deal for him. He has closed 19 big deals since the beginning of 2016 and spent USD 12 billion (about 17.70 billion AUD).

 

This deal could be a boon for the dimming shine of Tiffany as the brand has failed to attract the attention of millennials and needs a serious revamp. One of the simplest reasons why the brand is still remembered by previous generations but is still unable to lure the younger generations is that Millennials don’t want to shop where their parents did. It is probable that the Louis Vuitton brand and Arnault will go for the much-needed brand revamp soon!

Keep checking this space for more on Louis Vuitton and Tiffany & Co. brand deal.