Moët Hennessy Louis Vuitton SE (OTC: LVMUY), commonly referred to as LVMH or Louis Vuitton, is a French luxury conglomerate formed from the 1987 merger of the renowned fashion house Louis Vuitton and wines and spirits company Moët Hennessy. The merger created one of the world’s premier sellers of luxury products. Moët Hennessy itself was the product of a merger between Moët & Chandon—producer of luxury champagne brand Dom Perignon—and cognac maker Hennessy in 1971.
Though LVMH has been in existence in its current form since 1987, the Louis Vuitton brand in particular has a much longer history, having been launched by its namesake founder in 1854.
Today, LVMH owns 75 brands in six business groups: Wines and Spirits, Fashion and Leather Goods, Perfumes and Cosmetics, Watches and Jewelry, Selective Retailing, and Other Activities. These business groups own brands such as Fendi, Givenchy, TAG Heuer, and many more.
Since 1989, Louis Vuitton has been led by chair and CEO Bernard Arnault. Arnault took a majority stake in the company and has since guided LVMH in a fast-paced acquisition spree, picking up dozens of new acquisitions in the past three decades. The company has seen major success with its strategy of acquiring many different luxury brands across multiple areas. It reported net profit of €4.7 billion on revenue of €44.7 billion ($53.0 billion) in 2020. LVMH’s market capitalization was $390.9 billion as of July 7, 2021.
Below, we’ll explore six out of several dozen acquisitions that LVMH has made throughout its history. LVMH does not typically provide revenue and sales figures for its individual brands.
Tiffany & Co.
- Type of business: Luxury jewelry
- Acquisition price: $15.8 billion
- Date of purchase: Jan. 7, 2021 (acquisition completed)
Tiffany was founded by Charles Lewis Tiffany in 1837 and has since grown into a leading global design house with a reputation for innovative jewelry design and expert craftsmanship. The company offers necklaces, bracelets, earrings, rings, and watches, as well as a variety of home accessories and fragrances.
LVMH announced plans to acquire Tiffany in late 2019 in an agreement that valued the jeweler at approximately $16.2 billion. But the coronavirus pandemic and its negative effects on the luxury jewelry market prompted Arnault to renegotiate a discount from the originally agreed-upon acquisition price. His initial demand for an 11% reduction in the deal price was met with a lawsuit from Tiffany intended to ensure the enforcement of the initial acquisition agreement. In the end, the two companies agreed to a purchase price of $131.50 per share, a 2.6% discount from the originally agreed-upon $135 per share, bringing the total purchase price to approximately $15.8 billion.
LVMH said that Tiffany, which will join the company’s Watches and Jewelry business group, would help to bolster its position in jewelry and expand its presence in the U.S. The deal is also expected to strengthen Tiffany’s presence in Europe and China.
- Type of business: Luxury goods
- Acquisition price: €3.7 billion
- Date of purchase: March 7, 2011
Known for creativity and colorful jewelry designs, Bulgari has been at the forefront of luxury goods since its founding in 1884 by Sotirio Bulgari. The deal, which LVMH announced in March 2011, dramatically expanded the company’s Watches and Jewelry business group. The acquisition included the purchase of a 50.4% stake in Bulgari from the Bulgari family, as well as a tender offer for the remainder of the company.
Watches and Jewelry remains one of the smaller LVMH groups when it comes to profit. In 2020, this group delivered €0.3 billion profit on €3.4 billion in revenue.
- Type of business: Fashion
- Acquisition price: Estimated $259.4 million to acquire majority stake (see below)
- Date of purchase: Nov. 24, 2001
Italian luxury fashion house Fendi was founded by Adele and Edoardo Fendi in 1925. The company is known for its fur, leather goods, and other luxury products. LVMH bought a stake in Fendi before becoming a majority stakeholder in 2001. LVMH’s ownership began when it and Prada each bought a 25.5% stake in Fendi in 2000. Then, LVMH became the majority stakeholder in November 2001, when it agreed to buy Prada’s stake. In so doing, LVMH continued to add to its growing stable of luxury and designer brands.
LVMH’s Fashion and Leather Goods group, of which Fendi is a part, generated €7.2 billion in profit on €21.2 billion in revenue in 2020.
- Type of business: Fashion
- Acquisition price: 1 franc
- Date of purchase: 1984
Fashion giant Christian Dior is famous for its designer clothing and is part of LVMH’s highly profitable Fashion and Leather Goods group. The brand was founded in 1946 by its namesake founder.
Arnault’s investment in Christian Dior predates the existence of LVMH as it currently stands. Arnault purchased Parisian textile group Boussac, in bankruptcy protection, in 1984 for a symbolic one franc. Boussac’s assets included Christian Dior.
The Dior brand has proven a staple of Arnault’s holdings—and, in turn, LVMH’s business—ever since. In 2017, LVMH and Arnault proposed a complex $13.1 billion transaction to consolidate the company’s ownership of Dior by buying out minority shareholders.
- Type of business: Personal care and beauty products
- Acquisition price: Not available
- Date of purchase: July 1997
Founded in 1969, Sephora is a retailer of personal care and beauty items, with roughly 15,000 different products on offer as of this writing. At the time of LVMH’s acquisition, Sephora was part of a family of brands owned by founder Dominique Mandonnaud. LVMH’s Selective Retailing business group, of which Sephora is a part, generated a loss of €0.2 billion on €10.2 billion in revenue in 2020.
- Type of business: Champagne
- Acquisition price: Not available
- Date of purchase: 1986
Founded in the late 18th century by Philippe Clicquot, the Clicquot winemaking business that eventually became Veuve Clicquot was well known in its early years among champagne connoisseurs across Europe and the U.S. The company is credited with inventing rosé champagne.
Louis Vuitton purchased Veuve Clicquot in 1986, just a year before the fashion company merged with Moët Hennessy. In 2020, LVMH saw €1.4 billion in profit on total revenue of €4.8 billion from its Wines and Spirits group, of which Veuve Clicquot is a significant member.
LVMH Diversity & Inclusiveness Transparency
As part of our effort to improve the awareness of the importance of diversity in companies, we have highlighted the transparency of LVMH’s commitment to diversity, inclusiveness, and social responsibility. The below chart illustrates how LVMH reports the diversity of its management and workforce. This shows if LVMH discloses data about the diversity of its board of directors, C-Suite, general management, and employees overall across a variety of markers. We have indicated that transparency with a ✔.
|LVMH Diversity & Inclusiveness Reporting|
|Race||Gender||Ability||Veteran Status||Sexual Orientation|
|Board of Directors|
DePaul Business and Commercial Law Journal. “Creating Stability in the International Fashion Industry by Using Corporate Structures and Conglomerates.”
Financial Times. “How One Franc Turned LVMH into the World’s Largest Luxury Group.”
LVMH. “Tiffany and LVMH Modify Merger Price.”
The Wall Street Journal. “LVMH and Tiffany to Have Short Honeymoon.”
Tiffany & Co. “The World of Tiffany.”
The Wall Street Journal. “Behind the LVMH-Tiffany Deal: Insults, Lawsuits and Political Intrigue.”
The New York Times. “Luxury Giant LVMH to Buy Tiffany for $16.2 Billion.”
LVMH. “2020 Annual Report,” Page 151.
The Wall Street Journal. “Prada Reaches a Deal to Sell Stake In Fashion House Fendi to LVMH.”
Fendi. “The History of Fendi.”
The New York Times. “Prada Sells Stake in Fendi for $265 Million.”
The New York Times. “LVMH to Take Control of Christian Dior in $13.1 Billion Deal.”
The New York Times. “The King of Posh.”
Veuve Clicquot. “Our History.”
LVMH. “Veuve Clicquot.”