Tiffany has a new owner. France-based fashion company LVMH is adding Tiffany to its brand after Tiffany’s shareholders approve the deal. LVMH began trading last year, but a dispute between the two companies delayed the merger.
With the $ 15.8 billion deal between LVMH and Tiffany, LVMH continues to establish its dominance as a fashion brand. For owners of fashion labels such as Dior, Louis Vuitton, Fenty and Marc Jacobs, LVMH dominates the fashion world. The company remains profitable, with CEO Bernard Arnault being the fourth wealthiest person in the world.
However, the deal took place after a year of proceedings and disputes, as COVID-19 threw a wrench into everyone’s plans.
Looking for buyout
Tiffany has been struggling for several years due to lower sales. In 2019, luxury jewelery brands sought to find floating buyers. Finally, in November 2019, LVMH proposed adding Tiffany to the LVMH brand family.
At the time of the announcement, Tiffany CEO Alessandro Bogliolo felt that the deal would be the right step to bring Tiffany back into the black. “As part of the LVMH Group, Tiffany leverages its outstanding in-house expertise, unmatched craftsmanship and strong cultural value to reach new heights.”
Initially, LVMH offered to buy Tiffany for $ 16.2 billion. Aiming to buy one share for $ 135, the deal seemed suitable for both companies. Tiffany has the resources it needs to get back to the top, and LVMH has added Tiffany to its long list of luxury brands.
Trouble in paradise
2020 will roll and bring about a global epidemic. Tiffany suffered not only from the pandemic, but also from LVMH. Both companies’ revenues have dropped significantly thanks to the pandemic. 2020 also introduced stricter tariffs in the United States, making it difficult to export goods through Tiffany.
Due to a complete storm, the LVMH brand canceled its contract termination in September 2020. However, Tiffany decided to join the LVMH brand family and sued for a breach of contract. Tiffany argued that it had postponed filing with the appropriate international antitrust legislation and argued that LVMH had an obligation to carry out the transaction.
If the two had not settled, the deal would have been the second most expensive deal failure in 2020. Thankfully, this story turned out to be a happy ending.
In a sacred marriage
After a year of controversy, everything came to fruition at the end of 2020. Tiffany’s shareholders finally approved the offer from LVMH and its brand on December 31st. By early 2021, the two companies are aiming to complete the merger.
The final offer is worth $ 15.8 billion, $ 425 million less than the first offer in November 2019. factor.
Since the September 2019 incident, Tiffany’s sales have skyrocketed thanks to holiday demand in the United States and China. Experts believe that Tiffany will continue to grow sales thanks to this deal.
The future of LVMH and Tiffany.
LVMH was already the biggest name for luxury fashion brands. Adding Tiffany under its umbrella is more money for banks for LVMH. For them, this is exactly like any other brand.
However, being acquired by the LVMH brand could be a life-saving raft that prevents Tiffany from drowning. Tiffany has reduced sales over the years, after some poor rebranding choices have moved the old market away. The company lost its popularity and needed savings if it wanted to keep the 100-year-old brand alive.
The future is unpredictable, but experts believe the deal will benefit from the savings Tiffany needs. The resources that LVMH can provide to rebrand to Tiffany and find new customers are key to reviving the brand.
Is the LVMH brand acquiring Tiffany? Delve into long-standing controversy – Film Daily
https://filmdaily.co/fashion/lvmh/ Is the LVMH brand acquiring Tiffany? Delve into long-standing controversy – Film Daily
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