LVHM BOUGHT TIFFANY & CO.
THE BIGGEST COMPANY OF LUXURIOUS FRENCH-MADE CONSUMER GOODS, LVHM
BOUGHT TIFFANY & CO. WITH THE AMOUNT OF 16.2 BILLION DOLLAR.
The biggest company of Luxurious French-made consumer goods LVHM (Moët Hennessy • Louis Vuitton S.A) has announced that they agreed on buying Tiffany & Co. with the amount of 16.2 billion dollars. Owner of a total of 75 luxurious brands including Bvlgari, Chaumet, Louis Vuitton, Christian Dior, Fendi, Givenchy and Tag Heuer, the billionaire chairman of LVMH, Bernard Arnault stated that with this purchase, the position of the company in luxurious jewelry and USA market has been strengthened.
According to the statement made by the company, it has been noted that they have agreed to buy the 180-year Tiffany brand and its 300 shops all over the world with the amount of 135 dollars per share… The agreement will be made in 2020. It is expected to approve the agreement in the next year when all the details are determined.
Transfer of Tiffany will strengthen the position of LVMH in the jewelery sector and increase its assets in the USA. The addition of Tiffany will transform the Watch and Accessory department of LVMH and will complete 75 selected Houses of LVMH. Bernard Arnault, Chairman and CEO of LVMH stated that “We respect and admire Tiffany. We intend to improve it with our diligence and commitment that we show to our other brands. We will be proud to have Tiffany among our iconic brands and will look forward to seeing Tiffany continue its developments for future centuries.”.
Alessandro Bogliolo, CEO of Tiffany known its Elegant and blue boxes, and seen as a synonym of elegance, innovative design, quality craftsmanship and creative perfection for more than 180 years, said that: “Tiffany has focused to apply our basic priorities to promote sustainable and long-term growth. This process carried out during the inner transformation of our legendary brand will provide more support, source and momentum while proceeding to be a New Generation Luxurious Jeweler. Tiffany, as a part of the LVMH group, will reach new peaks by benefiting from attractive inner expertise, unique craftsmanship and strong cultural values.”
After the statement of agreement, shares of LVMH, traded at Euronext Paris Stock Exchange was increased to 405.15 Euro by 2% from 396.26 Euro at closing on Friday. Shares of Tiffany traded at Frankfurt Stock Exchange was increased to 110 Euro by 5% compared to closing with a 6.6% increase.
Tiffany, having sales in the amount of 4.4 billion dollars by 7% in 2018 compared to the previous year has 300 shops all around the world. Shares of the company, 44% of which sales are from America and 43% from the Asia market have increased by 50% since the interest of LVMH has been heard in the press. Driving force in the luxurious products industry are Chinese consumers are at the age of 20s and 30s. In North America, depending on the decrease in the visitors of malls, it has been observed a declaration in luxurious consume goods. Claudia D’Arpizio, a partner of Bain & Co, has attracted attention to the importance of Chinese consumers in the global luxurious market and stated that “in 2025, 45% of global luxurious product market will consist of purchases of Chinese consumers and half of these purchases will be carried out in China”. A consultancy company Bain & Co states that personal luxurious products marker has grown by 6% in 2018 compared to 2017 and reached 260 billion euros. In the report of Bain Global Luxurious Products Market Research, it is estimated that the industry will reach 271-276 billion dollars with growth between 4 to 6%. It is estimated that the total growth of the market will reach 320 – 365 billion Euro in 2025. According to the report, the growth in the jewelry is faster than luxurious fashion products and it is expected that the jewelry industry will grow by 7% and reach 20 billion dollars.