For the 3rd in this series of posts regarding brands ownership in luxury fashion, I’m dedicating the whole page for the behemoth conglomerate Louis Vuitton Moet Hennesy (LVMH) Group. As usual, I organized the brands based on how the parent company treats them. In this case, LVMH organizes the business groups as the following (percentages refer to revenue share based on 2013 Annual Report):
- Fashion & Leather Goods – 34%
- Selective Retailing and Other Activities – 29% combined
- Wines & Spirits – 14%
- Perfumes & Cosmetics – 13%
- Watches & Jewelry – 10%
LVMH has a 23.1% stake in Hermés and the company does not expressly include more information than that in its annual report. Furthermore, the group also has a private equity arm that is not mentioned in the annual report. L Capital Asia, as the name implies, is focused on brands in Asia and the Pacific – China, India, Taiwan, Singapore, Australia.
In most of the brands in each business group, LVMH has a 100% ownership and almost always a majority stake. The following are some notable exceptions and also interesting facts on LVMH acquisitions:
- LVMH took a minority stake in British newcomer Jonathan Anderson’s label, J.W. Anderson. Jonathan Anderson also became the creative director of the Loewe brand, on the heels of the departure of Stuart Vevers to Coach. The exact terms of the agreement are not public as of now.
- LVMH forged a joint venture agreement with the designer Marco De Vincenzo, former designer for Fendi.
- After a battle with Prada, LVMH took a 80% stake in Cova, a Milanese pastry shop in early 2014.
- The company is currently redeveloping La Samaritaine, a Paris architectural attraction that used to be a department store, which LVMH bought in 2001. The project plans include a department store as well as a 72-room Cheval Blanc (another LVMH brand) luxury hotel.
What I found the most interesting is how Dior is incorporated into the brand. LVMH includes Dior Parfums and Dior Watches within its portfolio but not the Dior ready-to-wear and couture. Technically, Christian Dior owns a minority stake in LVMH and this is quite an oversimplification of the labyrinthine ownership of Dior and LVMH shares by the Arnault family. See below for a visual representation culled from different sources. There’s a lot of history to how this structure came to be and I will devote a completely different post on it because it will require a lot more research, some of them involves public documents in French. Even Forbes is struggling to make sense of it.