The world’s biggest luxury goods company, Louis Vuitton, buys US-based jeweller Tiffany & Co for more than $16bn. This is a huge success for the owner of Louis Vuitton, Bernard Arnaultto, who now owns one of the fastest-growing upmarket sectors. In an interview, Arnaultto said Tiffany had an unparalleled heritage and fitted perfectly with his other brands.
Contact information of Tiffany and Louis Vuitton
|Contact number||1300 582 827||1800 829 152|
|Address||Level 4 70 King Street, Sydney NSW 2000||175 Pitt Street Sydney, NSW 2000|
What went wrong with Tiffany?
Tiffany has been affected by lower spending by tourists and a strong US dollar. The company is something of a New York institution and its flagship store is situated next to Trump Tower on 5th Avenue. Tiffany and Co became popular after being featured in the 1961 Audrey Hepburn film “Breakfast at Tiffany’s”. Founded in 1837, the company employs more than 14,000 people and manages about 300 stores, out of which 12 of them are in the UK.
Tiffany and Co is associated with diamond and gemstone rings but sadly, it has lost its appeal in recent years. The designs are not quite keeping up with millennials so it just needs a re-boost and a re-brand. Millennials don’t want to shop where their parents did, which is why Tiffany has been struggling in recent years and has finally decided to give up the independent ownership.
Louis Vuitton’s big take over
Arnaultto has desired the business since buying the Bulgari brand in 2011 for $5.2bn. In an interview, he mentions that he has immense respect and admiration for Tiffany and expect to develop this jewel with the same dedication and commitment that he and his team have applied to each and every one of their projects. LVMH has around 6,000 employees and a network of more than 4,590 stores. Other brands under Louis Vuitton include Kenzo, Tag Heuer, Dom Pérignon, Moet & Chandon, and Christian Dior. Arnaultto feels proud to have Tiffany sit alongside their iconic brands and look forward to ensuring that the brand continues to thrive for centuries to come.
This new deal values each Tiffany share at $135 in cash and is costlier than the initial offer of $120 a share, which valued the business at $14.5bn. Tiffany chairman Roger Farah expresses his feelings by saying that this deal provides an exciting path forward with a group that appreciates and will invest in the company’s unique assets and strong human capital.
LVMH is paying a decent price, but it’s worth keeping in mind that many luxury brands are difficult to value. LVMH turned an old-fashioned brand – Bulgari – into something more cutting edge and growing sales in the process. It’s time for Tiffany to revamp and get back in the light. One obvious deal would be the sale of the company’s majority holding in Moet-Hennessy to Diageo, which would be an eager buyer, but over the years LVMH has shown itself unwilling to sell.
Tiffany has tried it’s best to broaden its appeal to younger customers. It also asked Kendall Jenner, one of the biggest influencers on Instagram, to be one of the models for2019’s spring and summer collection. Back in 2018, it brought in Reed Krakoff as its chief artistic officer.
LVMH appears to do very well rebranding and this can be a real turnaround story. Let’s see how LVMH uplifts Tiffany and bring it back in the light.
Q1 – Who founded Louis Vuitton?
Louis Vuitton was a French fashion designer and businessman, who is the founder of the Louis Vuitton brand of leather goods now owned by LVMH. Before becoming a designer, he had been appointed as trunk-maker to Empress Eugénie de Montijo, wife of Napoleon III.
Q2 – Who founded Tiffany?
In 1837 New York became the proving ground for 25-year-old Charles Lewis Tiffany and John B. Young. They opened a stationery and fancy goods store with a $1,000 advance from Tiffany’s father.
Q3 – What’s so special about Tiffany jewelry?
Not only does Tiffany sells engagement rings, but also watches, high jewelry, bracelets, earrings and more. They utilize expensive diamonds as well as less costly semi-precious stones in order to create some unique pieces adjusted for each and everyone’s budget.