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LVMH Engaged In Tiffany Makeover After Conclusion Of $16 Billion Acquisition


01/08/2021


LVMH Engaged In Tiffany Makeover After Conclusion Of $16 Billion Acquisition
Bernard Arnault, the son of the founder of LVMH has been installed in a new leadership position at Tiffany on Thursday following the conclusion of the $15.8 billion acquisition of the United States jeweller by the French luxury goods group.
 
Two executives from its Louis Vuitton handbag brand have also been selected by the conglomerate to run Tiffany and has said that the design team of Tiffany would also be overhauled prior to a change in strategy which, according to analysts, will target young shoppers and Asian customers.
 
A bitter legal dispute preceded the official closing of the acquisition deal which was done to boost LVMH’s position in a segment in which it was less active compared to fashion or spirits. After the Covid-19 pandemic hit the luxury goods market hard, LVMH backed away from the acquisition but finally concluded the real at a renegotiated discounted purchase price.
 
The role of Alexandre Arnault at Tiffany would be that of an executive vice president in charge of product and communication. Alexandre Arnault is one of four scions who have been given roles at LVMH and one who had already been stepping up his profile having previously run the luggage label Rimowa.
 
Under his leadership, Rimowa partnered with sportwear brand Supreme and the two created a collaboration while also making a huge social media slash which has been one of the favourite strategies for luxury brands to attract the younger generation.
 
Two LVMH seniors, including Michael Burke, chairman and CEO at Vuitton - the group’s biggest money spinner, will be the immediate boss of the young Arnault in his new role.
 
LVMH said that current CEO Alessandro Bogliolo, who is set to leave on Jan. 22, will be replaced by Anthony Ledru, who ran Vuitton in the United States as well as the label’s global commercial activities.
 
Apart from have previously worked at Tiffany, Ledru has also been involved with rival jeweller Cartier.
 
“The idea of pairing experienced managers with up and coming family members (and possible future leaders) creates a fruitful environment,” Bernstein analyst Luca Solca said in a note.
 
Bogliolo’s payout because of the change of control could be more than $44 million, according to court papers from the legal battle.
 
According to some analysts, LVMH – the owners of brands including Fendi and Veuve Clicquot champagne, will consider almost all aspects of Tiffany’s business including the company’s network of stores to strategies in areas such as online sales, as a part of LVMH’s strategy of repositioning the brand and to streamline it.
 
Artistic director Reed Krakoff was set to leave the company along with Chief Brand Officer Daniella Vitale, the conglomerate said. It did not name replacements.
 
“We are optimistic about Tiffany’s ability to accelerate its growth,” LVMH’s Bernard Arnault said in a statement.
 
According to its latest reported quarter results, Tiffany made a 70 per cent rise in sales in China as well as a 92 per cent surge in its e-commerce sales which indicates that the company has made a recovery from the Void-19 pandemic impact.
 
(Source:www.nypost.com)