Saturday 17 February 2018

Louis Vuitton closes deal for suitcase maker to the stars

Fans of Rimowa suitcases include actress Gwyneth Paltrow
Fans of Rimowa suitcases include actress Gwyneth Paltrow

Paul Jarvis and Sam Chambers

Moet Hennessy Louis Vuitton has agreed to take over suitcase-maker Rimowa for €640m and will put Alexandre Arnault in charge of the group's first German asset, a sign that Bernard Arnault is expanding his offspring's role in the luxury empire.

The world's largest luxury-goods maker is buying an 80pc stake from Dieter Morszeck, grandson of Rimowa's founder, LVMH said. Morszeck will run the Cologne-based business alongside 24-year-old Alexandre Arnault, who gets his first big job at his father's group. The acquisition is LVMH's biggest since the 2013 purchase of cashmere maker Loro Piana.

Rimowa's ribbed aluminum suitcases, a common sight in airport security lines, are owned by celebrities including and Gwyneth Paltrow.

With prices starting at under €400, the cases are less of a luxury than LVMH's Louis Vuitton, whose trunks typically cost thousands of euro. Founded in 1898, Rimowa's growth has outpaced the broader luggage market's 5pc expansion over the past five years, an LVMH spokesman said.

"LVMH is looking for brands that have heritage and a unique position," said Mario Ortelli, an analyst at Sanford C Bernstein. "They know that when they acquire these brands they can accelerate their development."

As part of LVMH, Rimowa will find it easier to get top locations in malls and benefit from discounted advertising, Ortelli said. For LVMH, the acquisition will add annual revenue of about €400m and follows its disposal of Donna Karan International in July. Rimowa - whose designs are based on the fuselage of the first metallic aircraft - has grown sales at a pace of 20pc per annum over the past two years, RBC Europe analysts estimate. LVMH shares rose 2.7pc to 156.15 euro at 1:17pm in Paris yesterday. (Bloomebrg)

Irish Independent

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