LVMH Buys Tiffany & Co for $23 Billion to ‘Restore its Lustre’

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By Published On: November 26, 20190 Comments

Jewellery brand, Tiffany & Co, has been acquired by LVMH for $23 billion in the conglomerate's largest purchase to date. This acquisition aims to 'restore the lustre' that Tiffany has been losing for some time.

Key Points:

  • LVMH has acquired Tiffany & Co for$23 billion (USD16.2 billion)
  • The acquisition aims to ‘restore [the] lustre’ that Tiffany has lost over the years
  • This is the largest ‘all-cash’ purchase that LVMH has made in its history.

Louis Vuitton Moet Hennessy (LVMH) is a French conglomerate that owns Dior, Givenchy, Céline and Marc Jacobs, among many others. The company made a bid in October to acquire the jewellery brand for $21.4 billion (USD14.5 billion), but no plans were made official until today.

LVMH has a market value of USD214 billion, and Tiffany & Co currently has an annual revenue of USD 4 billion. The sales for Tiffany’s have slipped over the years, and in an effort to regain its customer base, the jewellery has introduced luxury homewares and men’s jewellery.

The two companies came to an agreement to purchase Tiffany & Co for $135 aa share, accumulating to USD16.2 billion. “We strongly believe that LVMH is not only an ideal owner for Tiffany but also that this iconic brand is a perfect addition to our portfolio and perfect complement to our existing model,” explained Jean-Jacques Guiony, LVMH’s Chief Financial Officer.

Tiffany & Co began to ‘lose its shine’ and is slowly losing sales as the years go by, reports say. In the first half od 2019, its worldwide net sales decreased three per cent to USD2.1 billion and have since started to redevelop its image. The jewellery company hired Daniella Vitale as its new Chief Brand Officer.

Kendall Jenner for Tiffany & Co, 2019 via: Tiffany & Co

The former Barneys CEO will begin her new role on December 1st, following the collapse of the New York department store. “Daniella is a brand leader who has been successful in leveraging her strong product sensibility and appreciation for data and analytics to evolve a business,” said Alessandro Bogliolo, Chief Executive of Tiffany’s in a statement.

It has struggled to capture the attention of Millennials and Gen Z and is fighting to seize sales from China. Earlier this year, Tiffany& Co hired Kendall Jenner as the ambassador for the brand, with aims to boost its image with younger customers. Other ambassadors include Lady Gaga, Zöe Kravitz, Elle Fanning and Janelle Monáe. “Tiffany has always stood for the ideals of creativity, passion, and optimism,” said Reed Krakoff, the brand’s Chef Artistic Officer in 2017 for the ‘There’s Only One’ campaign. “These portraits epitomise individuality, embracing the natural beauty and unique style of each talent.”

“Within LVMH, Tiffany will be able to accelerate its ongoing strategy,” said Jean-Jacques Guiony. “We are optimistic that we can, with this fabulous brand, increase the revenues further and expand the margins.”

This is the largest acquisition of a brand by LVMH to date, surpassing that of Christian Dior, which LVMH acquired in 2017 for $19.19 billion (USD13 billion).  Since the acquisition, LVMH’s shares have risen 2.02 per cent, and the acquisition is positioned to be complete by mid-2020.

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