To achieve a successful acquisition is nothing more than the right price and the brand’s growth potential and return, last year’s Tiffany brand sales of up to 4.4 billion US dollars.
Editor’s note: This article is from WeChat public account “LADYMAX” (ID:lmfashionnews) , author Zhou Huining. Authorized to reprint.
The acquisition of Tiffany by LVMH, the world’s largest luxury goods group, is like a boulder falling into a calm lake, which has once again caused the luxury fashion industry to calm down.
According to Reuters quoted sources recently, the US luxury jewelry brand Tiffany Tiffany board believes that LVMH’s $120 per share total of $14.5 billion is too low to be the basis for negotiations, and another person familiar with the matter said that Tiffany’s psychology The price is $16.9 billion per share, and if LVMH is willing to raise the offer, Tiffany will open the accounts and cooperate with due diligence.
The current share of Tiffany is highly fragmented, with the exception of executives, 125 million shares are scattered among 850 fund institutions
The person familiar with the matter said that LVMH is considering a new takeover offer and plans to maintain Tiffany’s independence. If the deal is successful, it will be the largest acquisition of the group in history, far exceeding LVMH’s acquisition of Dior in 2017. 7 billion US dollars.
As of now, Tiffany and LVMH have not responded to the news. At the same time, the industry’s curiosity about the value of Tiffany is also fully motivated.
Why is Tiffany?
Keeping a vision at all times is one of the secrets of LVMH’s long-term enthusiasm for the industry. “I hate the past and I am interested in the future,” said the group owner Bernard Arnault.
High-end jewellery is seen as the next bonus point in the luxury industry, given the growing saturation of fashion, beauty and fragrances. According to Bain Consulting, jewellery is one of the strongest performers in the luxury goods industry in 2018, and the company expects a comparable growth of 7% in this year’s $20 billion global market.
This is undoubtedly a big cake for LVMH, which already has 75 brands and its business is distributed in wine, fashion leather, perfume beauty, watch jewelry, boutique retail and other 6 different sections.
At the same time, Gucci’s parent company, Kaiyun Group and Richemont Group, are also accelerating the layout of jewelry. The former core brand Gucci’s first high-end jewellery store opened at 26 Wangdome Square in Paris, which acquired the Italian jewellery brand Buccellati in less than $250 million in September.
In the current fierce competition, LVMH wants to improve the quality of luxury jewelry, it is necessary to choose the most large-scale and potential brands in the industry. According to the Fashion Business News, LVMH watch and jewelry division revenue increased 8% to 3.261 billion euros in the first three quarters, accounting for only 8.4% of total revenue. Richemont’s jewelry business revenue increased by 10% to 18.27 euros as of the end of June this year. .
The LVMH watch and jewellery division saw revenue growth of 8% in the first three quarters to €3.261 billion, accounting for only 8.4% of total revenue
The analysis pointed out that the same jewelry business, Cartier and Van Cleef & Arpels two-month income is more than double the LVMH jewelry and watches nine months of income. Last year, Tiffany’s brand sales reached $4.4 billion. This means that with Tiffany, LVMH’s share and strength in the field of luxury jewelry will be greatly improved.
This explains why LVMH will not hesitate to pay more than twice the price of Dior to Tiffany, knowing that the price of LVMH’s 51% stake in Bulgari in 2011 was $5.2 billion. As a benchmark for American luxury jewellery brands, Tiffany’s influence in the US market will be further expanded.
In May of this year, LVMH also suddenly increased its shareholding in the Italian jewelry brand Repossi, and its shareholding ratio increased from 41.7% to 68.9% to help the brand accelerate the pace of international expansion. Repossi was founded in 1920 by the family of the same name and is currently the creative director of the fourth generation heir, Gaia Repossi.
Cowen & Co. analyst Oliver Chen believes that LVMH’s offer is actually a bet. In the current fierce competition in the industry, there is no LVMH, Gucci parent company Kaiyun Group or Richemont Group also has