Can the LVMH Deal Help Tiffany Regain its Luster?
| Case Code: BSTR642
Case Length: 13 Pages
Pub Date: 2022
Teaching Note: Available
Organization : Tiffany and Co
Industry : Technology & Communications
Countries : United States
Themes: M&A, Brand Loyalty, Consumer Behavior
Abstract Case Intro 1 Case Intro 2 Excerpts
LVMH Moët Hennessy Louis Vuitton Se
LVMH Moët Hennessy Louis Vuitton SE was a French luxury conglomerate formed by the merger of fashion house Louis Vuitton and wines and spirits company Moët Hennessy . The company was formed in 1987 and was headquartered in Paris, France..
Problems of Tiffany
Tiffany had been experiencing low demand for its products after the recession in 2008. The brand was valued at $5.6 billion in 2018, down from $6.3 billion in 2015. It also failed to make it to the Forbes World’s most valuable Brands list in 2019, on which it appeared regularly for quite some time..
Reduction In Demand
The domestic demand for Tiffany was slowing down because after the recession of 2007-2009, middle-income American shoppers were cutting back on expensive and unnecessary purchases. Even though Tiffany offered them various collections, it was not able to entice them to spend on its products..
The LVMH Deal
In November 2019, LVMH Moët Hennessy Louis Vuitton SE (LVMH) and Tiffany announced that they had entered into an agreement on an all cash transaction, which valued Tiffany at nearly $16.2 bn . This was the biggest merger deal even in the luxury sector..
After The Deal
The deal offered benefits to both the parties involved and was expected to help in the geographical expansion of the two companies. While LVMH would grow its presence in the US, Tiffany would benefit from expansion in Europe and China..
In January 2021, LVMH selected Anthony Ledru (Ledru), Vuitton’s executive vice president, global commercial activities, as CEO of Tiffany. Ledru had been associated previously with Cartier and Harry Winston, and had joined LVMH in 2014 as CEO of its North American business from Tiffany..
Exhibit I: Some Milestones of Tiffany and Co.
Exhibit II: Operating Model of LVMH
Exhibit III: Luxury Goods Industry Trend
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