LVMH

LVMH Moët Hennessy Louis Vuitton SE
Societas Europaea
Traded as Euronext: MC
CAC 40 Component
Industry Conglomerate (Luxury goods)
Predecessor Moët & Chandon
Hennessy
Louis Vuitton
Founded 1987 (1987)
Headquarters Paris, France
Area served
 Worldwide
Key people

Bernard Arnault (CEO)

Antonio Belloni, Managing director
Products Clothing, cosmetics, fashion accessories, jewelry, perfumes, spirits, watches, wines
Services Department stores
Revenue Increase € 35.664 billion (2015)[1]
Increase €6.384 billion (2015)[1]
Profit Increase €4.001 billion (2015)[1]
Total assets Increase €57.6 billion (2015)[1]
Total equity Increase €25.8 billion (2015)[1]
Owner Christian Dior SE
via Financière Jean Goujon
Number of employees
 120,000 (2015)[1]
Subsidiaries List of subsidiaries
Website LVMH.com

LVMH Moët Hennessy Louis Vuitton SE, better known as LVMH, is a French multinational luxury goods conglomerate, native of France and headquartered in Paris. The company was formed in 1987 under the merger of fashion house Louis Vuitton with Moet Hennessy, a company formed after the 1971 merger between the champagne producer Moët & Chandon and Hennessy, the cognac manufacturer.[2][3][4] It controls around 60 subsidiaries that each manage a small number of prestigious brands. The subsidiaries are often managed independently. The oldest of the LVMH brands is wine producer Château d'Yquem, which dates its origins back to 1593.[5]

Christian Dior, the luxury goods group, is the main holding company of LVMH, owning 40.9% of its shares, and 59.01% of its voting rights.[6] Bernard Arnault, majority shareholder of Dior, is Chairman of both companies and CEO of LVMH.[7]In 2017, Arnault purchased all the remaining Christian Dior shares in a reported $13.1 billion buy out. The Dapifer reports that LVMH will gain ownership of Christian Dior haute couture, leather, both men’s and women’s ready-to-wear, and footwear lines[8]. 

Arnault's successful integration of various famous aspirational brands into a single group has inspired other luxury companies into doing the same. Thus, the French conglomerate Kering (formerly named PPR) and the Swiss-based Richemont have also created extended portfolios of luxury brands. The company is a component of the Euro Stoxx 50 stock market index.[9]

Financial data

Financial data (in million euros) 2006[10] 2007[10] 2008[10] 2009[10] 2010[11] 2011 2012 2013 2014 2015
Sales 15,306 16,481 17,193 17,053 20,320 23,659 28,103 29,016 30,638 35,664
Net profit 2,160 2,331 2,318 1,973 3,032 3,065 3,909 3,947 6,105 4,001
Total equity 11,594 12,528 13,887 14,785 18,204 23,512 25,666 27,907 23,003 25,799

During the first half of 2015, LVMH recorded strong results in Europe and United States. The revenue of the groupe increased of 19 per cent.[12]

Corporate structure

LVMH is based in 20 avenue Foch in the 8th arrondissement, Paris, France.[2] The company is listed on the Euronext Paris exchange,[13] and is a constituent of the CAC 40 index. As of 2010, the group had revenues of €20.3 billion with a net income of just over €3 billion.[11] By the 29 February 2016 the company had a share value of 78,126 million euros, distributed in 506,980,299 shares. In 2013, with revenue of $21,7 billion, LVMH is ranked first luxury goods company in Deloitte's "Global Powers of Luxury Goods” report.[14] The group currently employs more than 83,000 people.[11] Thirty percent of LVMH's staff work in France. LVMH operates over 2,400 stores worldwide.[15] Its current business plan aims to tightly control the brands it manages in order to maintain and heighten the perception of luxury relating to their products. For example, Louis Vuitton products are sold only through Louis Vuitton boutiques found in upmarket locations in wealthy cities or in concessions in other luxury goods shops (such as Harrods in London).

Shareholders

At the end of 2010, the only declared major shareholder in LVMH was Groupe Arnault, the family holding company of Bernard Arnault. The group's control amounted to 47.64% of LVMH's stock (with 42.36% held through Christian Dior SE and 5.28% held directly) and 63.66% of its voting rights (59.01% by Dior and 4.65% directly).[16] A further 2.43% of shares were declared as treasury stock, with the remainder being free float.[16] LVMH holds 66% of the drinks division, Moët Hennessy, with the remaining 34% held by Diageo.[17]

Subsidiaries

A partial list including some of LVMH's best-known brands and subsidiaries:[15][18]

Christian Dior SE

Make Up For Ever was established in 1984.[19] and was acquired by LVMH in 1999.[20]

On 7 March 2011, LVMH announced the acquisition of the 50.4% family-owned shares of the Italian jeweller Bulgari and the intention to make a tender offer for the rest, which was publicly owned.[21] The transaction was about $5.2 billion.[22] In 2011, LVMH invested $640 million in establishing LCapitalAsia.[23]

On 7 March 2013, National Business Daily reported that mid-priced clothing brand QDA would open stores with the assistance of LVMH’s private equity LCapitalAsia and the Chinese apparel company Xin Hee Co., Ltd. in Beijing.[23] In 2011, LVMH invested $640 million in establishing LCapitalAsia.[23] LVMH sales "decreased by about 10 percent from in 2011" in China, and LVMH stopped "opening stores in second and third-tier cities in mainland China".[23] Xue Shengwen, a senior researcher at ChinaVenture, said the developing trend of the market is to take advantage of more acceptable prices.[23]

In February 2014, LVMH entered into a joint venture with the Italian fashion brand Marco De Vincenzo, taking a minority 45% stake in the firm.[24][25]

Patronage

LVMH is a major patron of art in France. The group supported about ten exhibitions as "Le grand monde d’Andy Warhol"[26] and "Picasso et les maîtres"[27] at le Grand Palais in Paris. LVMH also endorsed the patronage of "l’atelier d’Alberto Giacometti" and "Yves Klein" at Centre Georges Pompidou.

Since 2005, when the LVMH flagship store opened in Paris at 3, avenue George V, 75008, the company presented close collaboration with contemporary artists.[28] Features included a light sculpture by American James Turrell, a 20-metre (65 feet) long "travelling staircase" showcasing the work of American video artist Tim White-Sobieski and an elevator linking the store to the top floor by Iceland's Olafur Eliasson.[29]

In 2006, gallery space was inaugurated on the second floor of the same building and named "Espace Culturel".[30] "Icônes" was one of the first exhibitions.[31] Shigeru Ban, Sylvie Fleury, Zaha Hadid, Bruno Peinado, Andrée Putman, Ugo Rondinone, James Turrell, Tim White-Sobieski and Robert Wilson were the nine artists invited by Louis Vuitton to participate in it.

In addition, LVMH foundation created the "young creators LVMH award", an international competition opened to French and international beaux-arts students.[32] Each year, six grants are allocated to the winners.

In November 2013, LVMH created the LVMH Young Fashion Designer Prize, which comes with a €300,000 grant with a year of mentoring and is the brainchild of Delphine Arnault.[33] The first winner will be chosen in 2014.[33] In February 2014 20 finalist for the prize were shown in London, such as Simone Rocha, Thomas Tait, Meadham Kirchhoff, Marques'Almeida, J JS Lee, and others.[34] In May 2015 Marques'Almeida was announced as the second winner.[35]

LVMH underwrites other fashion competitions, including the Andam prize in France, the International Festival of Fashion and Photography in Hyères, France, an investment fund for young designers created by the French Ministry of Culture and Communication, and a scholarship program and sponsored lecture theater at Central Saint Martins in London.[33]

The group also lends Stradivarius violins to young talented musicians. Maxim Vengerov and Laurent Korcia have used the instruments.

References

  1. 1 2 3 4 5 6 "Annual Report 2015" (PDF). LVMH.com. Retrieved 4 February 2016.
  2. 1 2 "LVMH Moët Hennessy Louis Vuitton SA – Company History". Funding Universe. Retrieved 30 June 2011.
  3. ↑ Rachel Sanderson in Milan (6 March 2011). "Retail & Consumer – LVMH to take controlling stake in Bulgari". FT.com. Retrieved 30 June 2011.
  4. ↑ "LVMH group, Moet Hennessy Louis Vuitton: world leader in luxury, listed on CAC 40 index.". LVMH.com. Retrieved 30 June 2011.
  5. ↑ The Beginnings of Château d'Yquem Château d'Yquem Retrieved 29 January 2010
  6. ↑ "Organizational chart as of April 30, 2013". Dior. Archived from the original on 17 December 2013. Retrieved 12 April 2016.
  7. ↑ "25. Bernard Arnault". CNN. Retrieved 11 May 2010.
  8. ↑ "LVMH Subsidiaries, Brands and the $13 Billion Christian Dior Buy Out - The Dapifer". THE DAPIFER. 2017-04-25. Retrieved 2017-06-10.
  9. ↑ Frankfurt Stock Exchange
  10. 1 2 3 4 "A solid performance in a contrasting economic environment" (PDF). LVMH. Retrieved 12 December 2012.
  11. 1 2 3 "Annual Report 2010" (PDF). LVMH.com. Retrieved 4 February 2012.
  12. ↑ Singh, Prachi (July 29, 2015). "LVMH H1 revenues rise 19 percent". FashionUnited. Retrieved July 30, 2015.
  13. ↑ "LVMH". European Equitites. Retrieved 12 December 2012.
  14. ↑ Deloitte Global Powers of Luxury Goods 2014 report
  15. 1 2 LVMH First half 2009 interim report LVMH Retrieved 29 January 2010
  16. 1 2 "LVMH – Reference Document 2009" (PDF). LVMH. pp. 237–238. Archived from the original (PDF) on 9 May 2010. Retrieved 24 April 2010..
  17. ↑ Walsh, Dominic; Boyle, Catherine (23 April 2009). "LVMH denies being in Mot sale talks with Diageo". The Times. London.
  18. ↑ Financial Documents LVMH 2012
  19. ↑ Wellington, Elizabeth (2013-08-01). "Mirror, Mirror: Joy! Make Up For Ever comes to King of Prussia". philly.com. Retrieved 2013-12-03.
  20. ↑ "Dany Sanz, pionnière du make-up". elle.fr. Retrieved 2013-12-03.
  21. ↑ Roberts, Andrew (7 March 2011). "LVMH Plans to Buy Bulgari for $5.2 Billion After Acquiring Majority Stake". Bloomberg. Retrieved 24 October 2011.
  22. ↑ Wendlandt, Astrid; Simpson, Ian (7 March 2011). "LVMH bags jeweller Bulgari in $5.2 billion deal". Reuters. Retrieved 24 October 2011.
  23. 1 2 3 4 5 Kang, Xiaoxiao (March 7, 2013). "LVHM investing in Chinese mid-priced clothing market". Morning Whistle. Retrieved 2013-05-10.
  24. ↑ Astrid Wendlandt (24 February 2014). "LVMH invests in Italian brand Marco de Vincenzo". Reuters.
  25. ↑ Socha, Miles (24 February 2014). "LVMH Takes Stake in Marco de Vincenzo". WWD. Retrieved 24 February 2014.
  26. ↑ Présentation de l’expo Warhol Rmn.fr
  27. ↑ LVMH, mécène de l’exposition Rmn.fr
  28. ↑ "Exclusively for the Champs-Elysees".
  29. ↑ "BlouinARTINFO".
  30. ↑ "Espace Culturel".
  31. ↑ "Louis Vuitton s’est associé à neuf créateurs".
  32. ↑ Prix LVMH des jeunes créateurs Artefact Paris
  33. 1 2 3 Miles Socha (21 November 2013). "LVMH to Establish Global Fashion Prize". WWM. Retrieved 21 November 2013.
  34. ↑ Socha, Miles (13 February 2014). "Delphine Arnault Unveils LVMH Prize Finalists". WWD. Retrieved 13 February 2014.
  35. ↑ Friedman, Vanessa (22 May 2015). "Marques’Almeida Wins 2015 LVMH Prize". The New York Times. Retrieved 24 May 2015.
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