The devil works hard, but the M&A team at LVMH work harder. It’s clear that LVMH has no interest in resting on its laurels, after the successful purchase of Tiffany & Co., reports have surfaced of discussions regarding the sale of American clothing brand Ralph Lauren.
As reported by Axios, LVMH and Ralph Lauren have been in discussions about the possible sale for a couple of years now, which would be another significant step into the US market by the luxury giant. At the current valuation of Ralph Lauren, a deal just shy of US$8 billion (AU$11.1 billion) would be one of the largest ever prices paid for an apparel brand.
On many levels, the sale makes sense. Mr Lauren remains at the business he founded in 1967, with roles as chairman and chief creative officer, but after his 82nd birthday, must surely have succession planning at the centre of his discussions with LVMH. The record-breaking sale of his company would be an appropriate way to round out his remarkable career, cementing him as one of the most important influencers on American culture of the last half-century.
When the discussion first started, there was one possible fly in the ointment thanks to the differences in which American and European companies approach the luxury market. However, following the successful sale and thus-far seamless transition of ownership at Tiffany & Co., it’s thought that LVMH will be more confident to further push into the American market.
Likewise, M&A opportunities within Europe are reportedly slim at the moment, as much of the luxury market is already consolidated into a handful of larger groups, including LVMH, Kering and Richemont. This shift in focus toward the US market can be seen in a number of smaller investments by LVMH Luxury Ventures, which has recently announced positions in Aimé Leon Dore and Hodinkee.
While neither LVMH nor Ralph Lauren has offered comment on the reported talks about the sale, it’s a story that we’ll be keeping a close eye on.