How about a nice Swiss watch to go with that fabulous outfit and handbag?
Luxury tycoon Bernard Arnault is bulking up his empire again, adding Tag Heuer to LVMH’s stable of fashion brands and accessories.
Arnault paid $821 million for the luxury sports watch maker, saying he could help Tag Heuer “extend its brand into new areas.”
The deal gives Arnault more than a platform to expand into the upscale watch market; it also solidifies LVMH’s spot as the world’s biggest luxury goods maker, at a time when European rivals Gucci, Prada and Vendome are trying to build up their own empires.
“So many luxury brands are at a saturation point,” said David Wolfe, creative director of The Doneger Group, a retailing and fashion consulting company.
“Americans step down and do fusion lines, bastardizing their image,” he added. “But Europeans believe it makes more sense to build a stable of luxury brands, so there’s some integrity left.”
LVMH makes and sells some luxury watches now through its Fred jewelry stores and its DFS Duty Free Shops.
But Tag Heuer watches, which retail from $650 to $15,000 and compete mainly with Swatch’s Omega, make the French conglomerate a serious player in the business.
Tag Heuer is just the latest addition to Arnault’s luxury kingdom, which already includes Louis Vuitton, Givenchy, Christian Dior and Veuve Cliquot champagne.
This year Arnault has bought Bliss Spas, Hard Candy Cosmetics, and has made a run at Gucci.
He also has a stake in the yet-to-be launched sportswear e-tailer Boo.com and a number of other, non-fashion Internet businesses.
Arnault is also rumored to be interested in buying the Italian leather goods maker Fendi and the Japanese cosmetics company Shiseido.
No. 2 luxury-goods maker Vendome has also been expanding its borders. The owner of Cartier, Dunhill and Montblanc pens recently bought the French jeweler Van Cleef & Arpels.
And Patrizio Bertelli, chief executive of Prada, has been on a buying binge. He has snapped up Church & Co., the house of German designer Jil Sander, Helmut Lang, and is also said to have his eye on Fendi.
Gucci’s Domenico De Sole has not yet made any purchases. But he is sitting on nearly $3 billion in cash he got when Francois Pinault bought a stake in Gucci, and the Italian says he is ready to spend it. Gucci is yet another alleged suitor for Fendi.
Shares of LVMH American Depositary Receipts fell 13/8 to 58 yesterday.
Shares of Tag Heuer ADR’s gained 11/16 to 1313/16.