Tiffany and LVMH Deal Under Scrutiny

The union between Tiffany&Co and LVMH, the largest acquisition that the luxury industry would have ever seen and a marriage that came with a €14.5 billion dowry, has been under scrutiny in the past week.

 

LVMH seemed to be having second thoughts as to the benefit of the acquisition, given the steep costs of the operation. Too many variables have come into being since a prenup agreement was signed in late in 2019. 

 

Among the reasons for which LVMH would have reconsidered the deal are both the looming global recession due to Covid-19, most hard-hit being luxury brands that did not align with a more robust multichannel strategy along with those still favouring bricks and mortar, and the social and political unrest in the US due to countrywide street protests that resulted in the prolonged closure of retail outlets. 

 

What seemed the most strategic alliance only six months ago is now plagued with reconsiderations and opacity, although it appears that LVMH is not going to reconsider the deal. Biding time might not be in the interest of both parties. Tiffany&Co’s shares enjoyed an appreciation of 30% since the potential acquisition was announced last year. The benefit of an alliance with the largest luxury group in the world is evident in the eyes of shareholders who may change their mind should the deal be off. The much-needed digitalisation and diversification of the American brand might be put off, in an increasingly hostile trading environment for luxury. 

 

Tiffany&Co generates most of its revenues from its core business, jewellery, with a little strategic approach to other categories like leather goods or fragrances, lagging behind its direct competitors like Cartier. A partnership with LVMH will bring in the same expertise that helped Bulgari find a clear position in the market with a strategic accent on diversification. 

 

LVMH might be put off by a supply chain that is supported by American based facilities for 60% of its output. However, Tiffany&Co’s appeal is also its significant brand presence in Asia, with 124 retail stores, mostly in mainland China. Despite the intensification of the trade war between the US and China, LVMH is positioned to shift Tiffany towards a non-US made, non-jewellery focussed product mix. China is bouncing back from the impact of Covid-19, and in 2019 Chinese costumers accounted for 90% of global market growth. A change of political administration in the US might be the deciding factor in this union.

SHARE
  • Facebook
  • Twitter
  • Pinterest
SIMILAR ARTICLES
A Verdict on Digital Fashion Week
By Fabio Ciquera
In the past two weeks, we have witnessed an array of different and varied virtual presentations,...
By Fabio Ciquera
In the past two weeks, we have witnessed an array of different and varied virtual presentations, online happenings and symposia. One cannot accuse luxury houses to lack inventiveness, and there is a genuine appreciation for the quick turnaround in moving everything online. From Loewe to Prada and...
In the past two weeks, we have witnessed an array of different and varied virtual presentations, online happenings and symposia. One cannot accuse luxury houses to lack inventiveness, and there is a genuine appreciation for the quick turnaround in moving everything online. From Loewe to Prada and Dior, among the many names, the creative solutions have been exciting to watch. This new reality...
Revival LDN: The Upcycled Fashion Brand Aiming At Helping the Environment
By Alice Ierace
For years now, many fashion brands have added sustainability to their vocabulary and, through...
By Alice Ierace
For years now, many fashion brands have added sustainability to their vocabulary and, through research and proposals, have tried to lessen the fashion industry’s huge impact on the environment. However, despite the efforts, many are still the fast-fashion brands ignoring the issue. The problem is...
For years now, many fashion brands have added sustainability to their vocabulary and, through research and proposals, have tried to lessen the fashion industry’s huge impact on the environment. However, despite the efforts, many are still the fast-fashion brands ignoring the issue. The problem is that, no matter how sustainable they deem they are, we are still living in a fast-paced environment...
Reflections on Life post Lockdown at MFW
By Alice Ierace and Elisa Carassai
Etro Kicking off day two of Milan Fashion Week was ETRO presenting its Men’s Spring Summer 2021...
By Alice Ierace and Elisa Carassai
By Alice Ierace and Elisa Carassai
Etro Kicking off day two of Milan Fashion Week was ETRO presenting its Men’s Spring Summer 2021 and Women’s Resort 2021 collections with an informal gathering at Milan’s iconic Four Seasons Hotel. “We are finally back together, in the garden of this iconic hotel, in the heart of Milan’s...
Etro Kicking off day two of Milan Fashion Week was ETRO presenting its Men’s Spring Summer 2021 and Women’s Resort 2021 collections with an informal gathering at Milan’s iconic Four Seasons Hotel. “We are finally back together, in the garden of this iconic hotel, in the heart of Milan’s Montenapoleone district. We want to highlight that we are a family, that Etro is a family living in a world...
White Mountaineering Brings Back BLK Line
By Elisa Carassai
Showcasing at Paris Fashion Week, ’s White Mountaineering is the creative baby of Japanese...
By Elisa Carassai
Showcasing at Paris Fashion Week, ’s White Mountaineering is the creative baby of Japanese designer Yosuke Aizawa. This season, the designer not only presented an exclusive film directed by Daito Manabe from the Rhizomatiks, but he also decided to relaunch his original BLK line. Launched in 2009,...
Showcasing at Paris Fashion Week, ’s White Mountaineering is the creative baby of Japanese designer Yosuke Aizawa. This season, the designer not only presented an exclusive film directed by Daito Manabe from the Rhizomatiks, but he also decided to relaunch his original BLK line. Launched in 2009, White Mountaineering’s BLK Line proposed a new feel to outdoor wear with high-spec textiles and...
Digital Meets Local at Sunnei
By Elisa Carassai
Before lockdown started, Loris Messina and Simone Rizzo...
By Elisa Carassai
By Elisa Carassai
Before lockdown started, Loris Messina and Simone Rizzo were supposed to move in their newly-bought building, Casa Sunnei. Not being able to move in, and stuck quarantining home, the duo started reflecting on what they could do to move forward, at a slower...
Before lockdown started, Loris Messina and Simone Rizzo were supposed to move in their newly-bought building, Casa Sunnei. Not being able to move in, and stuck quarantining home, the duo started reflecting on what they could do to move forward, at a slower pace.  “During the lockdown, I realized we were moving at a pace that was too fast - we were...
A Play of Poetics at MFW
By Elisa Carassai
MSGM’s Midsummer Night’s Dream Kicking off the first day of Milan’s Digital Fashion Week was...
By Elisa Carassai
By Elisa Carassai
MSGM’s Midsummer Night’s Dream Kicking off the first day of Milan’s Digital Fashion Week was Massimo Giorgetti’s MSGM, with a film celebrating the new Milanese generation of young creatives, as well as the joy of life post-lockdown. Inspired by writer Isabella Santacroce’s book Fluo: Storie di...
MSGM’s Midsummer Night’s Dream Kicking off the first day of Milan’s Digital Fashion Week was Massimo Giorgetti’s MSGM, with a film celebrating the new Milanese generation of young creatives, as well as the joy of life post-lockdown. Inspired by writer Isabella Santacroce’s book Fluo: Storie di Giovani a Riccione (“Fluo: Stories of Young People in Riccione”) – who also happens to be from...
Purity and Tradition Intertwine at MFW
By Alice Ierace
Prada and The Show That Never HappenedFew people do fashion quite like Miuccia Prada. After the...
By Alice Ierace
Prada and The Show That Never HappenedFew people do fashion quite like Miuccia Prada. After the announcement back in February stating that Raf Simons would become the brand’s new co-creative director, today we were lucky enough to witness Miuccia’s last solo collection – her final bow after three...
Prada and The Show That Never HappenedFew people do fashion quite like Miuccia Prada. After the announcement back in February stating that Raf Simons would become the brand’s new co-creative director, today we were lucky enough to witness Miuccia’s last solo collection – her final bow after three decades of unforgettable shows.Of course, a simple presentation wasn’t in the plan – it needed that...
Auralee’s Imaginary Journey Through Time
By Alice Ierace
Firstly launched in Tokyo, designer Ryota Iwai decided to present Auralee’s latest Spring/Summer...
By Alice Ierace
Firstly launched in Tokyo, designer Ryota Iwai decided to present Auralee’s latest Spring/Summer 21 collection during digital Paris Fashion Week as one of the major independent fashion brands.As a brand, Auralee is renowned for its magnificent clean silhouettes, impeccable quality and minimal...
Firstly launched in Tokyo, designer Ryota Iwai decided to present Auralee’s latest Spring/Summer 21 collection during digital Paris Fashion Week as one of the major independent fashion brands.As a brand, Auralee is renowned for its magnificent clean silhouettes, impeccable quality and minimal styling. Its aim? A full exploration into the development of their own fabrics. By taking inspiration...