Investors appeared unmoved this morning as a rumour circulates that LVMH is lining up a move to acquire rival luxury group Richemont.
LVMH shares were up a modest 2.5% in early trading and Richemont was up just 1%.
The rumour originated in a report by Finanz and Wirtschaft, which itself issued the caveat that its source was “whispers behind closed doors”.
LVMH is currently valued at 390 billion euros, while Richemont has a market capitalisation of 74 billion euros.
LVMH bought Tiffany & Co. in 2021 and its owner, Bernard Arnault is known to admire the jewel in Richemont’s crown, Cartier.
If the acquisition were to go ahead, LVMH would dramatically strengthen its watchmaking operation with historic marques like Vacheron Constantin, Panerai, Jaeger-LeCoultre and IWC becoming stablemates with TAG Heuer, Hublot and Zenith.
Jewellers Bulgari, Tiffany, Van Cleef & Arpels would also come under the same umbrella.
In my opinion, such an acquisition would be similar to Daimler buying out Audi and VW at the same time! When competition is squelched, are profits maximized for a few while consumers suffer from lack of service, quality and innovation? While I greatly admire success, respectfully, I would like to ask Mr. Arnault, how much is enough?
As a designer of watches myself, I popped in to WOS (WATCHES OF SWITZERLAND), and casually spelled out that LVMH has eyes on especially Cartier and it’s luxury goods…. In my opinion, Cartier is more special than LV goods anytime of the night. LVMH is getting too much monopoly and while this is business, they, LVMH don’t have the best high end marques where horology is concerned. CARTIER may no longer be as valuable. They also were licking their lips about Patek Philippe watches, now that would be the end of any provenance PP has… But Thierry Stern ain’t interested!