Bulgari is new jewel for French fashion giant LVMH

Janet Babin Mar 7, 2011
HTML EMBED:
COPY

Bulgari is new jewel for French fashion giant LVMH

Janet Babin Mar 7, 2011
HTML EMBED:
COPY

TEXT OF STORY

Kai Ryssdal: If you follow luxury retail, if only to daydream occasionally, you’re probably familiar with the French conglomerate LVMH and some of its brands: Louis Vuitton, Christian Dior, Hennessy Cognac, to name just a few. Now its glittering empire is going to extend even farther.

LVMH is buying the Italian jewelry giant Bulgari, perhaps setting in motion a luxury land grab as high-end spenders try to make the Great Recession just a memory. Marketplace’s Janet Babin reports.


Janet Babin: The luxury retail market is a rarified universe. And in it, LVMH is like the sun, with most of the luxury industry revolving around it, and its colorful founder, billionaire Bernard Arnault.

Faith Hope Consolo: Their insatiable appetite to control everything, from Tag Heuer to Sephora to Thomas Pink.

That’s Faith Hope Consolo, with Prudential Douglass Elliman’s retail group, rattling off some of LVMH’s 60-some luxury brands. Consolo says the company is so successful because it carefully manages each of them. From fashion houses like Dior to Marc Jacobs, to wines like Chateau d’Yquem and Cheval Blanc, Consolo says you won’t find this stuff in a sorry heap on the discount table.

Consolo: They never go sale, that’s something where they’ve set the bar much higher than any of the other brands, and they seem to be able to keep nuturing the customer.

With all its reach though, watches and jewelry make up only 5 percent of LVMH’s business, far less than its competitors like Richemont.

Morningstar analyst Paul Swinand says that’s why the Bulgari acquisition makes sense.

Paul Swinand: Watches and jewelry are most of Bulgari’s business. So in one fell swoop, they’re more than doubling the size of their watches and jewelry business.

That’ll help LVMH better compete as emerging markets boost sales of goods to a trillion dollars in just over a decade.

I’m Janet Babin for Marketplace.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.