LVMH - The Luxury Goods Conglomerate

[Lola701]

The limits of BOF is in the title lol.
An industry like the fashion industry, which is still quite informal in many ways and hasn’t been infused with American corporatism has a lot to learn from… gossips.

Sometimes the personal life of a designer tells you so much about a collection and can be reflected on sales. The tensions in the office can be reflected on a collection or a strategy.

We saw it with Gucci. Frida at Gucci was having a relationship with her CEO, something that would have never been possible in the US. It changed actually everything in terms of decision making and in the strategy used to elevate Gucci. Overtime, Gucci became focused on leather, they redesigned the whole bag line, redid the stores. When they had a change of CEO, Giannini clashed left and the fortune of the house was changed in 2 weeks.
Essentially, that is pure gossip but it has an importance.

And BOF would have a very politically correct approach to this kind of subjects. WWD is usually more upfront but PUCK or others publications can go into it.

BOF didn’t reported that Sydney Toledano and Michael Burke attended several Schiaparelli shows because Della Valle was in business with LVMH. It’s not a major news but it can have an impact on the industry later…

 

[GRCF]

BOF and other more established news outlets are so pc when it comes to fashion as to lose advertising money, then a lot of online publications just repeat news without much further insights or added analyzes or perspectives

Indeed, even the FT which covers LVMH quite a lot lacks context, objectivity and nuance. Most publications don't get to the nitty gritty. I think like you said Miss Tweed will give you a bit more. I do have to say that Puck is very interesting. It is very gossipy but also does not give you much of anything sometimes, which is why I was surprised it was there. When it comes to LVMH gossip, the most detailed and a bit head-turning I've seen Lauren right was in relation to Michael Burke and sometimes about succession, which of course Mr. Arnault would want to silence anything in that regard, naturally. But sometimes, I often find myself rereading her newsletters or articles because I feel like I missed something and I'm left asking "okay, and?"

Obviously, as this leak showed, there will always be 'whistleblowers'. You directed your employees not to do something, and they did anyway. You can't stop that. A perfect example is a french business publication called Challenges (40% owned by LVMH), which has written articles that one would consider gossipy but also dangerous if one was concerned about succession. Someone will always talk, they will just be careful about the who, what, when and where they do.

 

[PDFSD]

Indeed, even the FT which covers LVMH quite a lot lacks context, objectivity and nuance. Most publications don't get to the nitty gritty. I think like you said Miss Tweed will give you a bit more. I do have to say that Puck is very interesting. It is very gossipy but also does not give you much of anything sometimes, which is why I was surprised it was there. When it comes to LVMH gossip, the most detailed and a bit head-turning I've seen Lauren right was in relation to Michael Burke and sometimes about succession, which of course Mr. Arnault would want to silence anything in that regard, naturally. But sometimes, I often find myself rereading her newsletters or articles because I feel like I missed something and I'm left asking "okay, and?"

Obviously, as this leak showed, there will always be 'whistleblowers'. You directed your employees not to do something, and they did anyway. You can't stop that. A perfect example is a french business publication called Challenges (40% owned by LVMH), which has written articles that one would consider gossipy but also dangerous if one was concerned about succession. Someone will always talk, they will just be careful about the who, what, when and where they do.

i agree 100% with Puck leave me as well with the same feeling :"okay, and?"

 

[Lola701]

A perfect example is a french business publication called Challenges (40% owned by LVMH), which has written articles that one would consider gossipy but also dangerous if one was concerned about succession.

Funny enough, l’Informé is financed by Xavier Niel.

They want to control their communication (either Le Figaro or BOF) but ultimately you can’t escape leaks because of the gossipy nature of the fashion industry.

Everybody gossip. Executives are friends with editors who are friends with other insiders…etc. If it happens that Lauren gossip with someone she trust, or if any other journalist do the same, it will be talk about.

I totally understand the list but it seems impossible to escape.

 

[NYLA22]

Indeed, even the FT which covers LVMH quite a lot lacks context, objectivity and nuance. Most publications don't get to the nitty gritty. I think like you said Miss Tweed will give you a bit more. I do have to say that Puck is very interesting. It is very gossipy but also does not give you much of anything sometimes, which is why I was surprised it was there. When it comes to LVMH gossip, the most detailed and a bit head-turning I've seen Lauren right was in relation to Michael Burke and sometimes about succession, which of course Mr. Arnault would want to silence anything in that regard, naturally. But sometimes, I often find myself rereading her newsletters or articles because I feel like I missed something and I'm left asking "okay, and?"

Obviously, as this leak showed, there will always be 'whistleblowers'. You directed your employees not to do something, and they did anyway. You can't stop that. A perfect example is a french business publication called Challenges (40% owned by LVMH), which has written articles that one would consider gossipy but also dangerous if one was concerned about succession. Someone will always talk, they will just be careful about the who, what, when and where they do.

Yes, exactly. Lauren Sherman writes A LOT but in some newsletters, it's really only one or two sentences that contain any real information. Otherwise, it feels like you have read 700 words of nothing.

 

[Nimsay]

Bernard is setting people up to be fired or potentially sued (I forgot French NDA laws). Imagine Billionaire Bernie saying "please no". Yea he's not asking you anything, there is a razor sharp sword backing this.

 

[Nimsay]

I forgot I missed that Dior Book Tote controversy.... I think that personal responsibility is needed here.

I think the quality of the bag was dictated by the weave, meaning there is really no way to make it better quality without adding thread... Maybe they could've slapped some leather trim but the whole point of the book tote is being sewn at-once ...

Beyond understanding the manufacturing nature of the bag it informed me that the bag wasn't exceptionally high quality. i don't know how that isn't obvious - to me it was very clear.

I had many people in my life ask about a BT but I always told them not to waste their money because its not worth nearly 4k. I didn't need to look at a purchase order - or whatever - to know that...

Recently I was directing people to the Versace Athena which is literally exactly the same but 1/3 of the price.

Who cares about comments on instagram from people who aren't buying any Dior. Not even a lip liner...

 

[LadyJunon]

I had many people in my life ask about a BT but I always told them not to waste their money because its not worth nearly 4k. I didn't need to look at a purchase order - or whatever - to know that...

Recently I was directing people to the Versace Athena which is literally exactly the same but 1/3 of the price.

We stan all efforts to reduce Dior's revenue.

 

[PDFSD]

I forgot I missed that Dior Book Tote controversy.... I think that personal responsibility is needed here.

I think the quality of the bag was dictated by the weave, meaning there is really no way to make it better quality without adding thread... Maybe they could've slapped some leather trim but the whole point of the book tote is being sewn at-once ...

Beyond understanding the manufacturing nature of the bag it informed me that the bag wasn't exceptionally high quality. i don't know how that isn't obvious - to me it was very clear.

I had many people in my life ask about a BT but I always told them not to waste their money because its not worth nearly 4k. I didn't need to look at a purchase order - or whatever - to know that...

Recently I was directing people to the Versace Athena which is literally exactly the same but 1/3 of the price.

Who cares about comments on instagram from people who aren't buying any Dior. Not even a lip liner...

But the reference nr of the bag in question in the police documents was not the book tote ....so far i remember ......nonetheless bad the whole thing and widespread issue for more brands ...

 

[Olaffo]

LVMH Succession Intrigue

Bernard Arnault has begun clearing the executive decks for the next generation—Delphine, Antoine, Alexandre, Frédéric, and Jean—amid growing anticipation of another sale and fresh acquisition targets.

puck.news

Anyone has access to that article ? I’m quite intrigued by the succession and how it will impact their portfolio and future appointments.

 

[PDFSD]

​

PUCK.NEWS.com​

LVMH Succession Intrigue​

Bernard Arnault has begun clearing the executive decks for the next generation—Delphine, Antoine, Alexandre, Frédéric, and Jean—amid growing anticipation of another sale and fresh acquisition targets as the fashion world braces for change.


Among the more obvious portents of the coming transformation is that C.E.O. and chairman Bernard Arnault has begun replacing executives within his inner circle with people who could become his children’s closest advisors. Photo: Denis Charlet/AFP/Getty Images

October 7, 2024

In the days since I returned from Paris Fashion Week, virtually all my calls and conversations have centered on LVMH, from potential designer changes to speculative M&A moves to executive shuffle tea-leaf reading. Most of the conjecture is utter nonsense, of course, and yet the totality of it underscores how the industry has been incorrectly, and predictably, focused on superficial amusements (i.e., the designer speculation and innuendo) rather than the structural changes behind it all.
Among the more obvious portents of the coming transformation is that C.E.O. and chairman Bernard Arnault has begun replacing executives within his inner circle with people who could become his children’s closest advisors. Toni Belloni (former group managing director, Italian right hand), Chris de Lapuente (former head of group that includes Sephora), and Jean-Jacques Guiony (C.F.O.) are all basically out; Sidney Toledano (former Dior C.E.O. and Fashion Group head) is halfway out. Meanwhile, current heir apparent Delphine Arnault (Dior), Pietro Beccari (Louis Vuitton), Pierre-Emmanuel Angeloglou (Fashion Group deputy), and Cecile Cabanis (next C.F.O.) are still in, with more appointments ahead. Arnault may have no plans to retire, himself, but he appears to be unsparing about colleagues nearing retirement age. (Former Louis Vuitton C.E.O.-cum-Fashion Group head Michael Burke, by the way, is still around and active in the business—and under 70—so perhaps something else is in store for him.)

As I mentioned last week, I suspect there will be another shake-up soon. Toledano, who returned to help run the fashion group after Burke stepped back, won’t stay in that position forever. I’ve also been told to keep an eye on C.E.O. changes at the small-but-impactful brands owned by the group.
These maneuvers make the org chart whereabouts of Arnault’s grown children even more tantalizing. My assumption is that eldest child (and only daughter) Delphine will stay in a commanding role, either at Dior or running the Fashion Group. (And yes, the LVMH Prize, too.) Antoine, the eldest brother, once had “lots of things coming,” as an LVMH spokesperson put it in November 2023. These days, however, he is outwardly rudderless, though I’m sure he makes plenty of impact behind the scenes. (Maybe it’s better that way?)
The younger boys are preoccupied with their timepiece businesses, which seem like threshold jobs. Jean, the youngest, is director of Louis Vuitton watches. Frédéric, the C.E.O. of LVMH Watches and also manager of the family office, is being introduced to more and more outsiders. Alexandre Arnault, currently the most compelling character in the quintet—he runs marathons, speaks perfect English, and wears Bode—is in the U.S. overseeing product and comms at Tiffany alongside longtime LVMH soldier Anthony Ledru. I heard that August sales at Tiffany were up year over year, which is a good sign for them both. But being in the U.S. means that Alexandre is missing out on the Saturday morning store calls, which Bernard Arnault does alone, or with a family member, every week. (During the Paris shows, he was spotted alone at Le Bon Marché conversing with sales associates.)
The Arnaults are a close-knit family by all accounts. And despite the hiccup with Burke’s semi-exit earlier this year, this is a carefully managed orchestration. After all, the Burke news leaked just six months after Arnault sent a letter to top executives saying that anyone who spoke about the family, or trade secrets, to reporters would be heavily reprimanded, and probably fired. The paranoia about leaks—people are afraid their phones are being tapped—indicates these are not merely cosmetic changes, but the first serious stages of succession planning. Remember, Arnault isn’t thinking two years ahead, he’s thinking 10 years ahead.

---

Acquisition Murmurs​

Obviously, the warning against speaking to the press hasn’t stopped the chatter, indicating that some of Arnault’s closest advisors have been frustrated by how the restructuring of the business has been managed. After all, the luxury industry is at an impasse, and heavily diversified LVMH is uniquely positioned to take advantage of the moment. Along with trimming the executive ranks, there is more shedding to be done in the fashion portfolio. Last week, the internal speculation was that they were selling one more brand, and that it could be Stella McCartney—of which LVMH owns only a partial stake—or Kenzo.
When I asked an LVMH spokesman about Stella in particular, he told me it was “fake news.” But whatever they discard after selling Off-White won’t matter as much as what they buy. Many people in the investment community are convinced that the group is about to announce a major acquisition, probably not on par with 2021’s $15.8 billion Tiffany deal, but perhaps as culturally significant. Burberry, which just got a new C.E.O., Joshua Schulman, was one of the names batted around. But despite an appealingly low $2.3 billion market cap, I wonder whether LVMH would want to assume responsibility for such a challenging turnaround.
The other name in circulation has been Armani, whose founder will celebrate his 90th birthday with a show in New York City next week. But I’m told the speculation there is utterly unfounded. In recent interviews, Giorgio Armani has said that he wishes to remain independent as long as possible, without ruling out a future merger. (In other words: Never say never, but definitely not right now.) Also, Armani’s decision to bring the design teams out with him for his runway bow is an indication that he hopes for continuity whenever he does, eventually, have to step down.
Of course, LVMH was circling Tiffany for decades before it actually bought the company, so this may simply be the first of many instances where a possible acquisition is floated before the two parties pull the trigger. There’s also the question of whether LVMH would even want Armani, a clothier first and foremost, as it plans for the future. Even leather goods don’t feel like a great long-term bet these days, compared to travel and hospitality.

One of the reasons Armani came up so much last week is because of Hedi Slimane. The speculation among creative types was that he bought a property in Milan, and that he was headed to either Armani or another Italian house to design. (It’s incredible what can set off the rumor mill…) At this point, this one does feel like “fake news” to me, as my P.R. friend would say. And yet, Slimane could go anywhere and succeed. (Even an Italian house typically run by an Italian. They’d rather speak French than English, after all.)
Size-wise, though, the only other place that would make sense for Slimane in Milan is Gucci. Of course, he’s not the only LVMH designer whose name has been brought up in connection to that house. On Friday, everybody was talking about the email Kering employees received, indicating that all brands would pause social media and online advertising on October 6 and 7, spurring some to speculate that an announcement was forthcoming. (It was probably, actually, to avoid any kind of messaging during the anniversary of the Hamas-led attack on Israel, which makes more common sense.)

So no, an announcement didn’t happen, but I heard that certain employees were also told on Friday that if anyone asked whether Dior womenswear designer Maria Grazia Chiuri was headed to Gucci, they should say, “no comment.”
Just because Kering told folks not to comment doesn’t mean the Chiuri gossip is true. (The policy at most of these companies is to say no comment to everything.) As for Jonathan Anderson replacing her at Dior—or replacing both her and menswear designer Kim Jones—I’ve been reluctant to weigh in more than I already have because, as with all of this, it feels only half-informed. My understanding from people close to Anderson is that nothing is certain at this moment. (There’s a scenario in which Anderson goes to Dior, and Delphine is replaced by Burke as C.E.O., but that’s educated conjecture.) The only thing we do know is that Anderson has transformed Loewe, and LVMH will need to figure out a way to keep up the momentum if he leaves. For creative people, leaving on a high is the best way to go. For the executives—as the Arnaults know better than anyone—it’s imperative that all these brands outlast any single designer.

 

[GRCF]

The comment regarding some execs being frustrated over restructuring tracks with an article in La Lettre A (?) a couple of months ago discussing the future of Chantal Gaemperle. The article alludes to Mme Gaemperle being frustrated over the passing of restructuring, being left out of hiring decisions within the Fashion Group and some of the fashion brands as well. It insinuates that the children (I think the author meant the younger ones) are not particularly close to her as they see her as part of the old guard. Of course it is all conjecture and hearsay or off the record.

I think their recent deals ( F1 and Paris FC) tell us a bit about succession, Frédéric was part in some way in the negotiations of both (along with Antoine for the latter), he is also in charge of Financiere Agache, the family’s holding company, which is a major responsibility. I think he will be at the center of acquisitions moving forward.

I think the natural heir apparent is Delphine, though I don’t think she’s leaving Dior anytime soon. Maybe she could take on the additional role of CEO of the Fashion Group as well. However, I think Frédéric is also the obvious second choice to Delphine, if not in competition directly with Delphine to replace their dad when the time comes. They are both a constant at BAs side during his weekend store visits, more than the other three (Alex for location reasons).

I don’t know what to think about Antoine and Alexandre. Antoine seems content on driving the image and communications of the group. Alexandre has definitely slowed down and stepped off the spotlight once he was shipped to NY.

I do think it was about time they start selling some of their brands. Kenzo and Stella make sense. LVMH purchasing shares of Richemont and Moncler is something to keep an eye on, BA is not doing it out of the goodness of his heart.

 

[style_expert]

Regarding Armani, Mr. Armani just stated in an interview with Corriere della Sera that he plans to retire within the next 2-3 years....which makes for an interesting time line.

 

[lhhbl]

Source: BoF

LVMH Fashion and Leather Goods Sales Fall 5%, Missing Estimates
By Robert Williams
15 October 2024

LVMH’s critical fashion and leather goods division reported third-quarter sales down 5 percent, missing the expectations of analysts who had predicted between 0 and 2 percent growth.
With unrivalled marketing budgets and a global edge competing for retail estate and talent, the Louis Vuitton, Dior and Loewe owner typically outperforms the luxury sector. Slipping sales at the conglomerate could signal even tougher times ahead for smaller rivals.
Group-wide, third-quarter sales fell 3 percent on an organic basis to €19.1 billion ($21 billion). LVMH said the numbers represented “good resilience in the current context.”

After gradually cooling from post-pandemic highs, luxury demand has dropped sharply across key regions this year. Macroeconomic headwinds and aggressive price hikes that turned off less wealthy buyers have made it hard for fashion brands to keep up momentum, particularly as consumers shift their spending back to other priorities like health, wellness, and travel.
ADVERTISEMENT

LVMH’s retailing division, which operates Sephora, and the perfume and cosmetics division dominated by Parfums Christian Dior both eeked out modest growth, with sales rising 2 and 3 percent respectively. The wine and spirits division was hardest hit, as the group struggles to get cognac sales back on track in the key Chinese market.

Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.

 

[Lola701]

It’s healthy IMO.
It’s time for more slow organic growth without outrageous price increases and the whole thing.
I think their fashion and accessories operations are fine. They needs to strengthen their key brands and obviously, they are making changes.

I think they should really focus on their wine and spirits divisions.

If LVMH is 5% down, I can only imagine how hard Kering was hit.
Pinault’s Assemblee Generale is going to be so entertaining!

 

[LadyJunon]

WWD on recent results:

LVMH Misses Expectations as China Flags
The group saw a “marked deterioration” in sales of fashion and leather goods to Chinese consumers.

By Joelle Diderich
October 15, 2024, 11:51am

PARIS — The Chinese dam has broken for LVMH Moët Hennessy Louis Vuitton.

The world’s biggest luxury group missed market expectations with a 4.4 percent drop in revenues in the third quarter, blaming lower growth in Japan and a “marked deterioration” in sales of clothing and accessories to Chinese nationals.

Overall sales in its key fashion and leather goods division were down 5 percent on a like-for-like basis versus the same period last year, sharply below a Visible Alpha consensus forecast for a 1 percent increase.

The sector leader’s struggles illustrated the depth of the crisis in confidence among Chinese consumers.

Their spending on fashion and leather goods was down in the midsingle digits in the third quarter, after rising in the mid- to high-single digits during the first half of the year, chief financial officer Jean-Jacques Guiony told analysts and journalists on a webcast on Tuesday.

Golden Week Not That Golden
Business in watches and jewelry remained under strain, but did not worsen. The country’s National Day Golden Week holiday, which ran from Oct. 1 to 7, did not move the needle either way, Guiony noted.

The French conglomerate, which owns more than 75 brands including Louis Vuitton, Dior, Tiffany & Co. and Sephora, is on a general cost-cutting drive, but it plans to continue investing in stores, communications and events in China next year in the belief that demand will eventually bounce back. “We don’t give up,” Guiony said.

“We are still very hopeful that the luxury industry will continue to develop and will continue to surf on the wave of the emergence of the upper middle class,” he added. “We see absolutely no reason why, after a cyclical downturn as we are experiencing today, we shall not be in a position to recover.”

The fortunes of luxury stocks have been closely tied to China’s announcements regarding economic stimulus measures designed to counter flagging growth linked to factors including a slumping property market and high youth unemployment.

The world’s second-largest economy is at risk of missing its target of around 5 percent growth in 2024, analysts say.

Guiony said recent announcements showed that Chinese authorities understand the need to spur household spending, though he would not speculate on the timing of a potential turnaround.

“Whether these measures will be sufficient or not, [or] will be completed in the future by further measures, I don’t have a clue, but clearly it shows that they are taking the issue very seriously,” he remarked.

Slowdown Since Second Quarter
Reporting results after the market close, LVMH said revenues totaled 19.07 billion euros in the three months to Sept. 30, below the Visible Alpha forecast of 20.01 billion euros.

Stripping out the impact of currency fluctuations, sales were down 3 percent year-on-year, indicating a slowdown from the second quarter, when organic revenues increased 1 percent.

Like-for-like sales in Japan were up 20 percent in the third quarter after a 57 percent jump in the prior three-month period as the yen recovered from its recent weakness.

In the rest of Asia, the trend worsened with a 16 percent decline in the third quarter.

Sales were flat in the U.S. and up 2 percent in Europe, representing a slight quarterly deceleration in both cases.

LVMH does not break down results by brand and Guiony offered little insight on the underperformance of fashion and leather goods, beyond saying that Vuitton was slightly above the division average and Dior slightly below.

Creative Churn
The segment is facing a period of creative churn, with the departure of Hedi Slimane at Celine, to be succeeded by Michael Rider; Kim Jones exiting Fendi, with no successor yet revealed, and Sarah Burton taking over at Givenchy.

Guiony said LVMH was counting on product innovation to emerge from the market slump, and the onus will be on the new artistic directors to stoke excitement around their offerings, although these won’t come on stream for several quarters.

Some analysts have suggested that its cash cow brands are also in need of a refresh.

“The impression is that both LV and Dior are in transition and need a breather before they regroup and restart. Both brands have seen the same womenswear creative directors in place for a long while, which seems less than ideal,” Bernstein analyst Luca Solca and his team said in a report in August.

Uncharacteristically, Tuesday’s initial press release from LVMH did not include a quote from chairman and chief executive officer Bernard Arnault, with the group merely reiterating its guidance for the year.

But at an event last week celebrating the 10th anniversary of the luxury group’s vocational training program for craftspeople, the luxury mogul emphasized the importance of quality products over marketing.

“Our future customers should feel drawn to our products because of their perception of the excellence of our craftspeople, and not because we’re trying to reel them in with some classic marketing tactic based on a study of what they want,” Arnault said.

LVMH’s share price has fallen by 27 percent from its intra-year peak of 872.80 euros on March 14 as inflation has curbed discretionary spending.

But Guiony made clear that LVMH would not be changing strategy or lowering prices in an attempt to win back aspirational customers.

“I think it would be a mistake. We have to stay true to what we are. The offer in luxury has been the key strength over the years,” he said. “The current situation is more demand-driven than offer-driven.”

Organic sales of watches and jewelry were down 4 percent in the third quarter, while wines and spirits posted a 7 percent drop. On the bright side, perfumes and cosmetics were up 3 percent, and selective retailing rose 2 percent.

Revenues at travel retail operator DFS are still below 2019 levels, and LVMH said last week that it was bringing back Ed Brennan as interim CEO to help steer the business back to growth.

More Management Changes?
There is speculation that other senior management changes are in the works, after a series of big shifts in LVMH’s C-suite and the appointments of Arnault’s sons Alexandre and Frédéric to its board of directors.

During this year alone, executive changes have included the nomination of a new deputy CFO and head of LVMH Fashion Group, as well as the stepping down of Antonio Belloni, LVMH’s long-standing group managing director.

In late September, LVMH revealed internally the upcoming departure of Christopher de Lapuente, CEO of the selective retailing division, who is retiring at the end of October.

Even as it tries to rein in spending, the luxury group must deal with a number of unexpected bills in the coming months.

If confirmed, French Prime Minister Michel Barnier’s plan to raise the corporation tax would cost LVMH between 700 million and 800 million euros, Guiony said.

Meanwhile, a disappointing Champagne harvest is set to wipe 40 million to 50 million euros from the profits of the division, he added.

Cécile Cabanis, participating in her first call as deputy CFO, said the wines and spirits division would also be hit by China’s imposition of temporary anti-dumping measures on brandy from the European Union, a measure that disproportionately affects cognac producers.

Cabanis said China accounts for just under 20 percent of Hennessy’s revenues, but tariffs should have limited near-term impact as inventories in China are high due to recent weak demand.

LVMH was the first major player to report third-quarter sales. French group Kering is due to unveil its figures on Oct. 23, followed by Hermès International on Oct. 24.

“For the time being, the material revenue miss of the luxury bellwether LVMH is a clear negative for the industry ahead of the [third-quarter] reporting season and in the run-up to key Christmas and Chinese New Year trading periods,” Thomas Chauvet, analyst at Citi, said in a research note after the results.

WWD

 

[GRCF]

Is Moncler taking over Burberry?​

By Rachel Douglass
11 hours ago

Business
Burberry Harrods Takeover. Credits: Picture Courtesy of Burberry.
Burberry’s struggles in recent years have been no secret. Despite the appointment of a new creative director and chief executive officer, its financials have remained somewhat lacklustre, leaving it in a vulnerable position for a potential takeover. And rumours have begun to swirl that down jacket specialist Moncler could be none other than its saving grace.
According to industry blog Miss Tweed, “growing industry chatter” suggests the Italian luxury brand may be on the verge of making a bid for the iconic British label, a move that Bernard Arnault, CEO of Moncler-backer LVMH, is believed to be “keen” on. Such a takeover is suggested to be part of plans to establish an “outdoor specialist giant”, the report stated.
In light of the report, Burberry shares rose up to 8 percent on Monday, a much needed uptick after the brand fell off the FTSE 100 index in September due to its low valuation. Moncler, however, has told various media that it would not comment on “unsubstantiated rumours” in regards to the alleged deal.

Burberry remains ‘a potential takeover target’​

Over the past year, analysts have deemed Burberry to be at risk of a potential takeover after it posted a series of disappointing financials, leaving shareholders concerned about its performance. A continued weakened demand for luxury alongside the surprise ousting of its former CEO, Jonathan Akeroyd, who was replaced by Joshua Schulamn in July 2024, has also had an impact on shareholder sentiment, bringing into question the strategy it has in place through which it hopes to encourage a turnaround.
Earlier this year, Abrdn investment manager, Sasha Kachanova, told The Telegraph: “Burberry remains a potential takeover target, particularly at its current valuation. As the sole British brand of scale operating independently – a rarity in the luxury industry – it boasts a rich heritage and the opportunity to enhance its iconic product lines and accessories.”
Moncler, meanwhile, could be a strong suitor for a Burberry bid. The company has garnered backing from French luxury giant LVMH, which had snapped up a 10 percent stake in Double R, an investment vehicle controlled by Ruffini Partecipazioni Holding, the firm of Moncler’s CEO Remo Ruffini that holds a 15.8 percent stake in the brand. In turn, LVMH secured a 1.6 percent stake in Moncler with the potential to grow it to 4 percent over the next 18 months.

Very interesting considering LVMH purchased a stake in Moncler, which has the potential to grow. This is going to be something to watch in the future, I doubt LVMH will keep their stake under 4% for long.