Wednesday, 5 October 2016

LVMH Buys 80% Share Of Rimowa.


Luxury news today rather than products or collections.  LVMH, the world's largest luxury grouo has expanded yet further by acquiring an 80 percent share of Rimowa.  The deal will cost LVMH $716 million, a sum it will recoup fairly quickly, with last years Rimowa turnover being $400 million.  

On the business end, Dieter Morszeck, the current CEO, and grandson of the founder, will remain co-CEO in conjunction with Alexandre Arnault, Bernard Arnault's 24 year old son.  The deal will mean Rimowa will have access to more high profile store locations, and discounted advertising, along with the massive capital injection it received.

However as luxury consumers this does not bother us, certainly we may see our LVMH shares increase in value, but what we care about is the brands we love and the products we love from those brands.  Rimowa is one of those brands which produces iconic, hard-wearing, long-lasting products which are priced highly, but reasonably considering the amount of workmanship in the manufacturing, and quality of the finished product.

What will this deal mean to us?  Will we see new "seasonal" ranges, or a more high-end "luxury" range.  Currently the topas range represents the pinnacle of Rimowa's product line-up, aside from the colour variations and the occasional collaboration, these items are expensive enough already.  If we look at what LVMH did to Berluti, adding a clothing line, expanding the accessories line, and massively ramping up the prices, Rimowa may begin to become far less affordable, and considerably less pure as a brand.  An idea which satisfies some, but can alienate many.

We shall have to wait and see the result of this takeover, it is set to be approved by the competition authorities in January 2017.  Let us hope our beloved Rimowa is not ruined by over zealous greedy corporate expansion.


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