LVMH Rationale for Tiffany Acquisition

Per an article in the WSJ, LVMH viewed Tiffany as a "sleeping beauty." Rationale for the acquisition follows:

Buying Tiffany would increase LVMH’s exposure to jewelry, one of the fastest-growing businesses in the luxury sector. Along with Tiffany rival Bulgari, LVMH also owns luxury watchmakers Hublot and TAG Heuer.

The conglomerate has for years sought to boost its presence in jewelry, which is one of LVMH’s smallest divisions. Tiffany is one of the few brands that has the size to move the needle for LVMH. Its executives like the jewelry business because it has steep barriers to entry, insulating big manufacturers from upstart competitors, people familiar with the matter said.

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LVMH executives view Tiffany as a “sleeping beauty,” a brand with great promise, but one that sat out the recent uptick in the jewelry market, according to people familiar with the situation.

They plan to increase marketing at Tiffany and provide more cash to accelerate its existing strategy, which includes launching more new products, upgrading boutiques and making the brand more appealing to millennials, the people said.

Although many of the products Tiffany sells aren’t as high-end as those sold by Bulgari or other European luxury jewelers, LVMH views its wide range of prices as a good way to attract younger shoppers, the people said.


Source: Ben Dummett, Suzanne Kapner, Matthew Dalton | “LVMH Bets It Can Restore Tiffany’s Shine With $16 Billion Deal” | The Wall Street Journal | 11/25/2020 | Visit

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