Potential Large-Scale Agreement Imminent: LVMH
In the world of luxury fashion, an exciting opportunity has arisen with the potential acquisition of the Armani empire. According to recent reports, besides LVMH, other corporations such as L'Oréal and EssilorLuxottica, Kering (owner of Gucci), and Prada have been mentioned as potential interested parties. However, analysts suggest that these corporations may have limited interest in taking a stake in the Armani empire.
The Armani empire, which generated €2.3 billion in revenue last year, could be worth around €10 billion if valued at three times its revenue. LVMH, which generated €85 billion in revenue last year, could potentially benefit significantly from the acquisition, especially in expanding its leather goods business, as Armani has so far focused mainly on clothing.
The author of this article believes in a sustainable turnaround for LVMH and finds the timing for such an acquisition not ideal but exciting. Bernd Förtsch, the management and majority shareholder of the publisher Börsenmedien AG, holds direct and indirect positions in LVMH. It's worth noting that Börsenmedien AG has a cooperation agreement with the issuer of the LVMH securities, granting the issuer a license to use an index developed by Börsenmedien AG. In return, Börsenmedien AG receives compensation from the issuer.
Dior and the wine and spirits business of LVMH are currently facing some challenges. However, the acquisition of Armani could provide an opportunity to expand the cosmetics business, given Armani's strong presence in the cosmetics industry.
LVMH (WKN: 853292) is part of the AKTIONÄR Portfolio and the European Champions Index, reflecting its significant influence in the global luxury market. Shares of LVMH are held in a real account at Börsenmedien AG.
It's important to note that Giorgio Armani's will stipulates that the Armani Foundation must sell an initial 15% stake in the fashion house to LVMH, EssilorLuxottica SA, L'Oréal, or another company of similar size within 12 to 18 months. Other luxury conglomerates like Kering and Richemont are theoretically possible, but Kering is financially weak, and Richemont considers Armani a step too big. Prada, currently integrating Versace, is not a likely candidate for the acquisition of Armani.
LVMH could also explore activities in the hotel industry with the acquisition of Armani, as Armani was one of the first designers to understand experiences as the future of luxury. The acquisition could potentially lead to the development of luxurious hotel experiences under the LVMH umbrella.
In conclusion, the potential acquisition of the Armani empire by LVMH presents an exciting opportunity for the luxury giant to expand its portfolio and strengthen its position in the luxury market. The timing may not be ideal, but the potential benefits could outweigh the challenges.
