Louis Vuitton Parent Company Buys a Luxury Hotel Chain for $3.2 Billion
Louis Vuitton’s parent company LVMH is ready to curate your entire existence, like an upscale Amazon Prime. On Friday, LVMH announced a deal in which it would acquire the luxury hotel brand Belmond, whose 46 hotels, cruise lines, and trains span 24 countries and include, most notably, Venice’s Hotel Cipriani (perhaps best known as the place where celebrities like George and Amal Clooney and Lady Gaga and her feathers stay during the Venice Film Festival), for a total of $3.2 billion, according to Reuters. (Though the price is likely to invite a bit of sticker shock, it’s actually nothing compared to the $13.1 LVMH dished out to take full control of Christian Dior last year.)
The deal, which will be finalized in the first half of 2019, according to a press release, expands LVMH’s reach into luxury experiences in addition to luxury consumer goods—the fashion conglomerate already owns the Cheval Blanc hotel chain, which includes a resort at Courchevel, in the French Alps, and the Bulgari hotels. In addition to properties in destinations like St. Petersburg, Rio de Janeiro, and Mandalay, Belmond also runs the 21 Club, the midtown Manhattan restaurant frequented by Donald Trump and Steve Mnuchin. This will “significantly increase LVMH’s presence in the ultimate hospitality world,” as LVMH CEO Bernard Arnault wrote in a statement announcing the purchase, worth $2.6 billion in equity value (essentially what LVMH pays up front) and $3.2 in enterprise value (the sum total of the deal).
View on Instagram
View on Instagram
Belmond announced it was up for sale in August of this year, having fended off an offer from an Indian conglomerate, the Tata Group, five years ago, according to the Dow Jones’s Marketwatch. This new acquisition has been interpreted as an effort to appeal to LVMH’s younger customers, who, per the Wall Street Journal, are more likely to invest in “experiential luxury”—staying at a chic hotel, taking a luxe train ride or river cruise—than in a luxe bag or pair of shoes.
Of course, LVMH would rather you have it both ways: In 2012, Louis Vuitton unveiled “Objets Nomades,” a collection of luxury travel items including a leather hammock that retails for a cool $44,500 and a hanging egg chair swaddled in fur that goes for $116,000. But until now, where could you possibly find two trees worthy of hanging up that chic hammock you spent more than a year’s rent on? Presumably, now there is an answer.
Related: Michael Kors Buys Versace, and Everything You Read About It on Twitter Is Wrong
Source: Read Full Article