 "LVMH to take 80% stake in German luggage brand Rimowa")
LVMH Moët Hennessy Louis Vuitton, the largest luxury conglomerate in the world, said on Tuesday that it had agreed to buy a controlling stake in the German luggage brand Rimowa for euro 640 million, or about $719 million.
The French company, whose brands include Christian Dior, Donna Karan, Louis Vuitton and TAG Heuer, said that it would buy an 80 per cent stake from Dieter Morszeck, the chief executive of Rimowa and the grandson of the founder. Morszeck would continue to hold an equity stake of 20 per cent in the business and maintain his leadership functions at the brand, LVMH said. Alexandre Arnault, the 24-year-old son of LVMH chairman Bernard Arnault, would become co-chief executive of Rimowa, alongside Morszeck.
The transaction would be LVMH's first acquisition of a German purveyor of luxury goods.
"Rimowa is a brand with a unique heritage," Bernard Arnault, the LVMH chairman and chief executive, said in a news release. "We share with Dieter Morszeck the same passion for innovation and a common desire to offer very high-quality products derived from a European tradition of craftsmanship." The transaction is subject to regulatory approval and is expected to be completed in January.
Founded in Cologne in 1898, Rimowa manufactures luggage and small leather accessories for men and women. It is best known for its aluminum, grooved suitcases. The company expects to report revenue of more than €400 million in 2016, LVMH said.
In a note to investors, Luca Solca, head of luxury goods analysis at Exane BNP Paribas, said the deal made sense for the French company.
"While not a widely expected acquisition, it gives LVMH greater exposure to the continuing development of tourism and the traveling consumer," Solca wrote. "Rimowa is the only high-end brand remaining in the market, after the acquisition of Tumi by Samsonite."
The appointment of Alexandre Arnault as co-chief executive also marks the latest scion of the Arnault family to take a senior leadership role within LVMH since Bernard Arnault became chief executive, chairman and majority shareholder of the conglomerate in 1989.
Bernard Arnault's daughter Delphine, 41, is director and executive vice president of Louis Vuitton, while his 39-year-old son Antoine is chief executive of Berluti and the chairman of Loro Piana.
© 2016 The New York Times News Service
The French company, whose brands include Christian Dior, Donna Karan, Louis Vuitton and TAG Heuer, said that it would buy an 80 per cent stake from Dieter Morszeck, the chief executive of Rimowa and the grandson of the founder. Morszeck would continue to hold an equity stake of 20 per cent in the business and maintain his leadership functions at the brand, LVMH said. Alexandre Arnault, the 24-year-old son of LVMH chairman Bernard Arnault, would become co-chief executive of Rimowa, alongside Morszeck.
The transaction would be LVMH's first acquisition of a German purveyor of luxury goods.
"Rimowa is a brand with a unique heritage," Bernard Arnault, the LVMH chairman and chief executive, said in a news release. "We share with Dieter Morszeck the same passion for innovation and a common desire to offer very high-quality products derived from a European tradition of craftsmanship." The transaction is subject to regulatory approval and is expected to be completed in January.
Founded in Cologne in 1898, Rimowa manufactures luggage and small leather accessories for men and women. It is best known for its aluminum, grooved suitcases. The company expects to report revenue of more than €400 million in 2016, LVMH said.
In a note to investors, Luca Solca, head of luxury goods analysis at Exane BNP Paribas, said the deal made sense for the French company.
"While not a widely expected acquisition, it gives LVMH greater exposure to the continuing development of tourism and the traveling consumer," Solca wrote. "Rimowa is the only high-end brand remaining in the market, after the acquisition of Tumi by Samsonite."
The appointment of Alexandre Arnault as co-chief executive also marks the latest scion of the Arnault family to take a senior leadership role within LVMH since Bernard Arnault became chief executive, chairman and majority shareholder of the conglomerate in 1989.
Bernard Arnault's daughter Delphine, 41, is director and executive vice president of Louis Vuitton, while his 39-year-old son Antoine is chief executive of Berluti and the chairman of Loro Piana.
© 2016 The New York Times News Service