LVMH Acquires Tiffany & Co.
In what is being called the biggest deal in the history of the luxury goods market, LVMH Moët Hennessy Louis Vuitton SE acquired Tiffany & Co. for $16.2 billion, it was announced Nov. 25.
The deal will increase the Paris-headquartered LVMH’s presence in America, as well as build its family of jewelry and watch brands, which includes Bulgari, Hublot and TAG Heuer. For the New York – headquartered Tiffany, the deal will support future growth, said Alessandro Bogliolo, Tiffany’s chief executive officer.
“Tiffany has been focused on executing on our key strategic priorities to drive sustainable long-term growth. This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve towards becoming the Next Generation Luxury Jeweler. As part of the LVMH group, Tiffany will reach new heights, capitalizing on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values,” he said.
Bernard Arnaud, LVMH’s chairman and CEO, said that Tiffany will be an important part of LVMH, the world’s largest and most influential luxury goods companies. Its brands include Dior, Vuitton, Fendi, Celine, Pucci and Marc Jacobs.
“We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our maisons. We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come,” he said.
The deal might also come as a boost to Tiffany’s sales. Net sales declined 3 percent for both its second quarter for its 2019 fiscal year and the first six months of the year, both were reported on Aug. 28. Worldwide net sales for the second quarter were $1 billion. Worldwide net sales were $2.1 billion for the first half of the year, Bogliolo said.
“Our second quarter and first half results were mixed with sales coming in below, but net earnings exceeding, our expectations. As with the first quarter, we are encouraged in the second quarter by sales growth attributed to our local customer base globally, which was again led by double digit growth in mainland China. With the tough comparison to last year’s strong performance in the first half behind us, and in spite of the headwinds of weak demand from foreign tourists, currency exchange rate pressures and continuing business disruptions in Hong Kong, we are actively managing what is in our control and positioning our brand to win, accelerating new product introductions and keeping a visible profile,” he said.