Throughout this week, rumors about the growing interest that the French international holding company LVMH, a leading company specializing in the luxury sector that owns fashion houses such as Louis Vuitton, Christian Dior or Loewe, from the Sephora cosmetics chain or from wineries such as Dom Pérgnon or Ruinart, would be showing by acquiring the American fashion multinational Ralph Lauren. Objective for which they would have been holding conversations with the North American fashion company in recent years, conversations that would have intensified for some time now.
Today there are few international companies that can even consider the option of bidding for a multinational of the stature of Ralph Lauren. A Group whose valuation would currently exceed 8,000 million dollars, and whose acquisition by LVMH would reach a new all-time high as far as a fashion firm corresponds, keeping the clear potential to easily exceed any of the acquisitions previous ones that it has been carrying out, with the exception of the Tiffany’s. Jewelry chain that LVMH finally acquired at the beginning of last year, 2021, for a total amount of 15,780 million dollars. A figure that is well in charge of highlighting the economic muscle that the French international holding company has, and that in fact it has only grown stronger during these last two years of the pandemic, in response to the taste of consumers for quality goods. luxury that has managed to shoot LVMH to total revenues of 64,215 million euros and up to a net profit of 12,036 million euros, at the end of its last financial year of 2021.
Figures that, to put them in the right context, are well above those recorded by Ralph Lauren. Multinational that, for its part, and in the absence of closing its last annual period, ended its fiscal year 2020/2021 with total sales worth 4,400.8 million dollars and with losses of -121.1 million dollars , as a result of the pandemic. Being able to take as a more neutral reflection of the company some figures for 2019 in which sales remained at around 6,159.8 million euros, while profit reached 384.3 million euros.
An operation that would preserve the legacy of Ralph Lauren and with which LVMH would continue to consolidate itself in the United States
Giving signs of a certain credibility to the news, or at least not deciding to deny it entirely, to the information that they were in charge of starting to spread from the news outlet Axios, LVMH have responded by refusing to comment on the information, while that from Ralph Lauren have not yet responded to the request of the British team of FashionUnited to offer any comment on the matter. A profile setting, which is taking place while the different analysts do not hesitate to praise the advantages that the operation could represent for both fashion groups, which would thus become the protagonists of one of the largest purchase operations of history All of this in the event that this operation was finally completed, lit up in the light of rumors that could well represent interested leaks, launched within the framework of the negotiations to try to raise the price of the offer, or even arouse the investment appetite of some other company or group interested in taking the reins of Ralph Lauren.
In this sense, with regard to the North American multinational, it is understood that its integration within LVMH would allow Ralph Lauren, one of the main symbols of the so-called “American style”, to secure its future and its legacy, joining a holding company such as the French company that has made the defense and good protection of the history of its different commercial brands its main flag and sign of identity. A characteristic that would be the one that would be weighing the most in the musings of the designer and businessman Ralph Lauren, at a time when his brand is already synonymous with the best American fashion, and in which, already at the age of 82 , would be finding it necessary to withdraw completely from the management and design bodies of the company. Some jobs in which he has already been supported, among other high-profile professionals, by his own family, with his son David Lauren occupying a management position within the company’s organization chart as director of brand and innovation.
Meanwhile, on the part of LVMH, the French multinational has historically avoided the acquisition of large North American companies and groups, given the differences, in its opinion, that exist in the approaches given to the term “luxury goods” in Europe. and in the United States. A circumstance that the French multinational would now see with new eyes, after the success that it would be reaping after the acquisition of Tiffany’s. Company that has embarked on a relaunch towards new and younger audiences, in what LVMH is perceiving as its opening to a new chapter that is beginning with very good and excellent results. A revenue that, beyond economic terms, is allowing it to deepen and begin to make a greater mark in a market as strategic as the United States, in front of whose public it would be preparing to put together a complete portfolio of native brands, of in order to be able to do battle with groups such as Michael Kors or Tapestry, which owns luxury brands especially known to North American consumers, such as Coach, Kate Spade and Stuart Weitzman.
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