LVMH sets up new business venture – 6/2/17

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LVMH confirmed last week that they have set up a new company, LVMH Luxury Ventures, a vehicle destined to invest in small, promising fashion, cosmetics or accessories companies.

Reuters reports that LVMH Luxury Ventures, which will headed by group deputy-head of mergers and acquisitions (M&A) Julie Bercovy, will buy stakes in luxury companies with sales of between €2 million and €5 million ($AUD2.8 million – $AUD7.015 million) and a high-growth potential.

“The aim is to accompany financially the development of these small nuggets to create value,” said an LVMH spokesman.

The venture will have a starting capital of €50 million ($AUD70.1 million) while the size of the investment allocated to each company will range from €2 million ($AUD2.8 million) to €10 million ($AUD14.031 million).

The luxury goods industry is seeing signs of a surge of emerging fashion brands that are proving popular with young consumers thanks to social networks. It’s all about Facebook, Instagram and a number of other social media platforms right now.

In other LVMH news, the world’s largest luxury group has confirmed the creation of a joint venture agreement that will see the French group take a 10 per cent stake in Italian eyewear manufacturer and distributor, Marcolin.

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Opticianonline.com reports that the companies will see the first fruits of the partnership in 2018, with the design and manufacture of eyewear for the Céline brand.

LVMH will control a 51 per cent stake in the new partnership and the remainder of the share capital will be controlled by Marcolin. Between €20 million ($AUD28 million) and €25 million ($AUD35 million) will be invested in the partnership over the course of the next four to five years.

It has been a busy few weeks for LVMH with an announcement likely to be made in the next week or so that they are looking to invest further in British fashion talent with a “major” investment in Central Saint Martins that will focus on sustainability.

Forextv.com reports that the new investment comes after six years of collaboration between LVMH and the college, which is part of University of the Arts London and the alma mater of designers including Riccardo Tisci, Phoebe Philo, Stella McCartney, Sarah Burton, Christopher Kane, Alexander McQueen and Hussein Chalayan.

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The money will provide additional scholarships and fund an original sustainability and innovation program. Its aim is to combine imaginative ideas and creativity with the discovery of “new, holistic solutions that balance the needs of people, planet and business,” Central Saint Martins said. The value of the LVMH investment has not been disclosed.

By Cassandra Murnieks

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