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Tag: bernard arnault

  • LVMH chief Bernard Arnault to visit China in June

    LVMH chief Bernard Arnault to visit China in June

    LVMH.PA chief Bernard Arnault is set to visit China, two sources told Reuters on Thursday, as European luxury goods makers closely track the pace of recovery of the key market following three years of COVID disruptions.

    One of the sources close to the matter said Arnault’s visit to the all-important Chinese market, which comes after high-profile visits to the country this week by JPMorgan Chase & Co JPM.NCEO Jamie Dimon and Tesla chief Elon Musk, will take place later this month.

    LVMH, home to brands ranging from Moet to Givenchy, declined to comment.

    The sources didn’t give a reason for the trip or say where in the country Arnault was likely to visit.

    The LVMH chairman and chief executive met with Chinese Commerce Minister Wang Wentao in Paris in April at the Avenue Montaigne flagship store of the group’s Christian Dior label.

    Arnault’s daughter Delphine Arnault, CEO of Dior, as well as other top LVMH executives attended the meeting, and the group pledged take part in China’s International Import Expo, which will be held in Shanghai in November.

    Chinese officials have been eager to emphasize the country is open for business since lifting lockdowns in December. The recovery has been patchy but the luxury sector has outperformed other consumer categories as wealthy consumers have maintained their spending habits on the Mainland.

    The planned visit for Arnault comes at a critical time for LVMH’s reboot of U.S. jeweler Tiffany, its largest acquisition ever, which it seeks to expand in China as part of a strategy to catch up with larger rival Cartier.

    A rebound in China helped lift LVMH’s first-quarter sales, which grew 17%.

    Executives from other luxury companies are also emphasizing China, especially as sector sales in the United States show signs of easing off of a strong, post-pandemic surge.

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  • LVMH whitdrawing Tiffany deal

    LVMH whitdrawing Tiffany deal

    French luxury-goods group LVMH has dropped its plan to take over Tiffany & Co, prompting the  New York jeweler to announce it will file a lawsuit to enforce the deal.

    The US$16.2 billion takeovers was agreed to before the advent of the Covid-19 pandemic and the jeweler’s share price had dropped well below the price LVMH had agreed to pay.

    However, LVMH’s board is using geopolitical and taxation factors to defend its position with the board issuing a brief statement late Wednesday Asian time after a board meeting confirming it would “not be able to complete the acquisition of Tiffany & Co”.

    The statement referred to a letter from the French European and Foreign Affairs Minister which directed LVMH to “differ” (sic) – thought to mean defer – the acquisition until after January 6 next year in “reaction to the threat of taxes on French products by the US”.

    Tiffany & Co had earlier requested LVMH to extend the closing date for the deal from the current expiry date of November 24 to December 31.

    LVMH’s board, having taken legal advice from advisors to its teams, said it resolved to comply with the merger agreement signed by the two companies in November last year, which stipulated the November 2020 closing date.

    “As it stands, the Group LVMH will therefore not be able to complete the acquisition of Tiffany & Co.”

    Tiffany & Co meanwhile, is alleging that LVMH has deliberately stalled the takeover to force a renegotiation of the price.

    The company will file a lawsuit with the Delaware Court of Chancery Wednesday US time seeking to force LVMH to close the transaction by the November deadline.

    “Tiffany alleges that LVMH has delayed the EU regulatory process to avoid closing before a mandated deadline, and threatened to walk away from the takeover unless the price tag is reduced,” the FT reported, citing “people briefed about the matter”.

    The Tiffany & Co sale has been the subject of considerable ongoing speculation since the impact of Covid-19 on luxury retailing and international travel.

    At one point, analysts were speculating that LVMH might begin acquiring shares on the open market at a price lower than the company had agreed to pay under the merger agreement. However, after a board meeting in June, LVMH issued a statement reiterating it would not buy shares on the market and was sticking to the deal.

    Reuters reported back then, however, that LVMH CEO Bernard Arnault was exploring ways to reopen negotiations in an attempt to reduce the price.

    “While Arnault now has concerns about overpaying for Tiffany, he still believes in the deal’s strategic rationale, according to the sources,” reported Reuters. “Tiffany will give LVMH a bigger share of the lucrative US market and expand its offerings in jewelry, the fastest-growing sector in the luxury goods industry.”

  • Bernard Arnault now richer than Mark Zuckerberg

    Bernard Arnault now richer than Mark Zuckerberg

    LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, announced record sales of 42.6 billion Euros in 2017, up 13% over the previous year, as all divisions turned in strong performances. Its net profit popped 29%.

    The news sent LVMH‘s stock up 5% on Friday. The biggest beneficiary of the announcement is LVMH’s longtime chairman and CEO Bernard Arnault, who owns more than 5% of LVMH’s stock. His fortune jumped $3.5 billion in just hours and was at $77.9 billion by noon on Friday.

    He is now the fifth richest person on the planet, up from number 11 last March when FORBES published our annual rankings of the World’s Billionaires. Since the list’s publication, his fortune has climbed more than $36 billion, helping him move ahead of Michael Bloomberg, Charles and David Koch, Larry Ellison and Carlos Slim. Today, he leaps ahead of Facebook’s Mark Zuckerberg.

    “The excellent performance, to which all our businesses contributed, is due in part to the buoyant environment but above all to the remarkable creative strength of our brands and their ability to constantly reinvent themselves,” said Arnault, in a released statement. “Continued innovation, entrepreneurial spirit and the quest for excellence: all Maisons continue to assert these core values while maintaining rigorous execution of their strategies on the ground.”

    The multi-billion dollar morning for Arnault is another chapter in what is turning out to be one of his best years yet.

    In April 2017, Arnault and his family announced a $13 billion deal to acquire Christian Dior and fold the fashion brand into LVMH. The move ends years of a convoluted, complicated cross holding structure between the two companies. The share price of Dior, in which Arnault now has a 97% stake and which represents the bulk of his fortune, has climbed nearly 38% since April and popped almost 5% on Friday.

    One of the world’s ultimate taste-makers, Arnault first got into the luxury goods business in 1984 when he bought Christian Dior. He has run LVMH, which owns 70 brands including Dom Perignon, Bulgari, Louis Vuitton, Sephora and Tag Heuer, since 1989.

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