CEO Bogliolo: Tiffany will reach new heights in the LVMH deal

Tiffany´s CEO Alessandro Bogliolo thinks the merge with the French luxury group LVMH will help the company to reach new heights. He commented the merge deal in the company press release yesterday.

-Tiffany has been focused on executing on our key strategic priorities to drive sustainable long-term growth. This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve towards becoming The Next Generation Luxury Jeweler. As part of the LVMH group, Tiffany will reach new heights, capitalizing on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values, Mr Bogliolo said.

The takeover deal was well managed. According to Financial Times, the LVMH CEO Bernard Arnault visited the US in the opening ceremony of the Louis Vuitton leather production plant in Texas in October. The US President Donald Trump was also one of the firsts to know of the acquisition, although no names was mentioned to him, Mr Arnault told the FT reporter yesterday of that Texas-event.

And the business circles are small in the luxury business. For example the CEO of Tiffany, Mr Bogliolo is also a known-person to LVMH from his earlier carrier as a senior position at the Italian fashion house Bulgari, now part of the French luxury group.

The Tiffany takeover or LVMH´s Christmas present is the biggest deal for the company. According to Bloomberg Opinion the deal values the Tiffany about 16 times Ebitda, which is nice compared to the earlier deals in the industry. According to Bloomberg data, the LVMH purchase of Bulgari in 2011, the valuation was 23-24 times, as was the Swiss company´s Swatch purchase of Harry Winston in 2013.

So, what is going to happen next? Will the mergers and acquisitions trend in the luxury business continue? Sure. And all luxury companies are heading to Asia. It is also expected that LVMH will increase the Tiffayny´s presence in the Asian markets and find the best locations for the high-end consumers of Tiffany. All studies show that the biggest growth for luxury brands is coming from Asian consumers in the coming years.

As Mr Arnault told the Financial Times, LVMH is increasing the desirability of the Tiffany brand.

– My goal with Tiffany -as it is for Louis Vuitton or Dior – is that desirability for the brand should be higher in 10 years time than it is right now, he said in the FT interview.

The announced deal will increase the other major luxury brands interest to join the growth race. The French rival Kering, with brands like Gucci, Saint Laurent and Bottega Veneta and the Swiss Richemont, with brands like Cartier, IWC and Piaget, are in the line.

The stock markets have also seen the increase of interest and for example nearly all the major luxury companies were trading up on Tuesday in the Tiffany aftermatch.

LVMH was trading up 0,77 % at 407 euros, Tiffany slightly up 0,01 % to 133 dollars, Kering (KER) up 0,40 % at 546 euros and the UK Burberry (BRBY) up 0,24 % to 2093 pounds. Only the Swiss Richemont (CFR) was trading down, 0,57 % at 76 Swiss francs.

Picture: Luxury watches from LVMH Group: Hublot Big Bang, Tag Heuer, Bulgari

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LVMH and Tiffany may announce the deal on Monday – Bloomberg

 

HD_PatekPhilippe_ChronographeFlybackQuantiemeAnnuelReference59601_Big&smallThe global luxury group, the French LVMH and the US jeweler Tiffany (TIF) are having their board meetings today on Sunday and it might be possible that the merger deal might be announced already on Monday, Bloomberg News says.

According to the information, LVMH has raised the price to 135 dollars a share, which would mean that the valuation of the New York jeweler would be more than 16 billion dollars. Tiffany´s shares closed to 125,51 dollars on Friday in Wall Street giving the market cap of 15,16 billion dollars. In October the LVMH-offering price was 120 dollars per share in cash.

The French LVMH (MC) is trying to enter the US jewellery markets with the acquisition of  Tiffany, which has over 300 different retail stores globally. It operates also in the field of luxury watches and home & accessories.

LVMH is the owner of the several well-known brands like Louis Vuitton, Dior, Bulgari, Hublot, Tag Heuer, DKNY, Belmond and Marc Jacobs. LVMH´s shares closed up 1,80 % to 396,20 euros in Paris on Friday.

Picture: Patek Philippe luxury watch “ChronographeFlybackQuantiemeAnnuelReference59601” Baselworld 2019. Tiffany is also reseller of Patek Philippe, Geneva watches.

 

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LVMH is considering Tiffany takeover – Bloomberg

The world largest luxury company, the French LVMH (LVMH) is considering a takeover of the US luxury company Tiffany & Co (TIF). The takeover, according to Bloomberg, would increase the French company´s presence in the US markets, but according to the news, there is no guarantee of the possible deal.

Tiffany, which was founded in 1837 in Manhattan, is one of the leading luxury houses in the US with the annual turnover of 4,4 billion dollars and net earnings 586 million dollars in 2018. The company has over 300 brand stores globally for its jewellery, timepieces, accessories and fragrances.  Nearly half of its sales comes from the US markets, while Asia counts about 30 %, Japan 15 % and Europe 11%.

The market cap of Tiffany is about 11,9 billion dollars, while the French rival LVMH is about 190 billion euros.

The French company LVMH has been investing in the US markets and last week the company opened its Louis Vuitton factory in Texas. LVMH´s other brands in the luxury jewellery category are for example Bulgari, Dior, Hublot and Tag Heuer.

Both companies enhance the luxury and sustainability integration and for example Tiffany has launched a Diamond Source Initiative, where customers can know the geographical region of their individually registered diamonds.

 

 

 

 

 

 

 

 

 

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LVMH: Hublot´s sale 250 million watches during the fairs

Jean-Claude Biver, the President of the LVMH´s Watch Division, estimates that  Hublot will sell 250 million watches during the BaselWorld fairs. The event, which is seven days long started on the 21st and they will end next week Tuesday. Biver commented the fairs in the interview in the Basler Zeitung on Saturday.

The event is important for watch manufacturers for two reasons as Biver says: ” Naturally we would like to make turnover, but the direct contact with the customer is also important – and that is why the BaselWorld is a double win for us.”

There has been speculation about the future concept of the BaselWorld after the Swiss Group Swatch decided not to take part in the event. According to Biver, the LVMH Group, which includes watch brands Hublot, Tag Heuer  Bvlgari and Zenith,  has given time to the fairs and their decision to take part in the next year event will be decided next week.

He also critiseses the decision to integrate the Genf Salon de la Haute Horlogerie and Baselworld. According to the decision the two events would both be in April next year, when the Genf event has always been in January.  Biver says that he would like to see both events to take place in January in order to have the full potential of  a calendar year.

 

 

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LVMH: Carbon Fund achieved its targets 2018

The LVMH (LVMH, Paris) Carbon Fund has achieved its objective for 2018, raising 11.3 million euros in financing for 112 projects designed to control and reduce the Group’s greenhouse gas emissions, the company said in the statement.

This result is that LVMH doubled the price per metric ton of CO2 generated from 15 to 30 euros in 2018.  By mechanically increasing the carbon contributions of each Maison, LVMH signals its intent to accelerate initiatives to reduce CO2 emissions.

-The success of our Carbon Fund once again underlines the major and decisive commitment of LVMH management and all our teams to help protect the environment and fight climate change.  The LIFE environmental program is a top priority for all our employees. We thank them for their engagement and we continue to count on them to help us achieve all our environmental targets for 2020,” said Antonio Belloni, LVMH Group Managing Director.

The 112 projects deployed in 2018 have eliminated nearly 2,500 CO2 equivalent metric tons of emissions annually. This is equivalent to the annual emissions of 1,600 European households.

Created in 2016, the LVMH Carbon Fund is a pillar in the Group’s environmental policy, which has announced a 25% reduction in CO2emissions by 2020 as one of its main objectives.  This aligns the Group with the 2°C climate target  agreed in the COP21 climate conference in Paris.

The annual contribution of each LVMH Maison is calculated by multiplying the greenhouse gas emissions from its activities by the carbon price set by the Group. The amount must then be invested the following year in eligible projects designed to reduce these emissions.

The investments were in all the Group´s locations: 29% in France, 34% in Europe (excluding France), 15% in Asia, 6% in Japan and 16% in the United States.

The projects included for example:

  • 80% of the projects concern energy efficiency: LED relamping, building insulation, upgrading to install more efficient air-conditioning and heating systems, energy consumption monitoring systems;
  • 13% of the projects enable production of renewable energy;
  • 6% of the projects concern other areas (purchasing of electric tractors, for example);

28 Maisons are actively engaged in this program: Acqua di Parma, Belvedere, Benefit, Berluti, Bulgari, Celine, Chandon India, Christian Dior Couture, DFS, Fendi, Fred, Fresh, Givenchy, Glenmorangie, Guerlain, Hennessy, Hublot, Le Bon Marché, Loewe, Loro Piana, Louis Vuitton, LVMH Fragrance Brand, MHCS, Parfums Christian Dior, Royal Van Lent, Sephora, TAG Heuer and Zenith.

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Stephane Bianchi to lead LVMH Watches

The French Luxury Group LVMH has appointed Stephane Bianchi as head of the Group’s Watch division as from November 1st.

He will become also the CEO of Tag Heuer and oversee the two other Watch brands in the Group, Hublot and Zenith.

Bianchi, 53, was the former CEO of the cosmetics Group Yves Rocher.

Mr Jean-Claude Biver, the current head of The Watch Group, is stepping down for health reasons, but will remain as non-executive chairman of the division, the company says.

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Hublot CEO: Double digit growth this year – Chinese consumers ranking 1st

Hublot CEO Ricardo Guadalupe says that he expects the company to grow double digit, that is about 10-11 %, this year, well above the average luxury watch industry. Speaking to ComteamPUB+ he says that this year also the Chinese consumers will be the first big customer segment for this Swiss Luxury Watchmaker.

– This year will be very unique for Hublot. Our growth estimate is double digit that is 10-11 %, which is well above the 5-6 % average growth rate in the luxury watch industry this year. This year is also the first year for Chinese consumers to be ranked the number one. Our biggest growth is coming from the Greater China area, he says to ComteamPUB+.

Hublot, part of the LVMH Group (MC:FP),  is having 8 different brand stores in China and totally 18  in Greater China and the company is planning to open new stores globally so that the total stores would be around 100 in the next couple of years. This week the new opening is in Genf, Switzerland and in June they will open a new brand store in London, in the Old Bond Street.

-We want that our customers can experience the Hublot brand when they are travelling. So this is also important that the store locations are fitting our targets. We also want to demonstrate our strong brand, he explains.

Digital transformation in the focus

Digital transformation is in the focus of luxury watch industry nowadays. Companies are building different customer experiences in the internet with storytelling and strong social media channels. For example Hublot is having 2,9 million Instagram followers and in Facebook they are having 4,1 million followers.

-Digital transformation is shaping our industry. For example Hublot is having now 50 % of its advertising costs in digital channels compared to other media channels. And we are planning to build our own e-commerce platform in the couple of years. We want Hublot digital boutiques to offer a new Brand experience to our worldwide customers, he adds.

This e-commerce has been very difficult with the luxury watch industry because of the pricing and brand value. For example another Swiss luxury watch company, Richemont, has decided to buy back their luxury watches from external dealers. This has caused the company 200 million euros profit fall according to the Financial Times.

Mr Guadalupe sees the market differently and says that Hublot would not have to do the same thing than Richemond.

-We know our customers and we track the watches we sell. Hublot has no stock while our production is in line with the demand, he explains.

Hublot´s annual production is about 50.000 units, price range from 6000 – 50.000 euros each and the production site is in Nyon, Switzerland. The average price is 20 000 euros according to the company.

The first smartwatch, Hublot Big Bang Referee

During the BaselWorld2018 Hublot also launched its first smartwatch, operating with Android. This luxury smartwatch is part of the company partnerships with FIFA World Cup now in June in Russia.

-We are thrilled with the feedback from this watch, Hublot Big Bang Referee FIFA World Cup Russia 2018. This is really the first smartwatch for us and it is also seen as the first marketing tool for our FIFA partnership. We have invited about 1000 stakeholders in our FIFA events and we are looking forward for this big event, Mr Guadalupe comments.

The luxury smartwatch industry is very diversified. Apple Watch is the market dominant, but other luxury watchmakers like Louis Vuitton, Hermes and Tag Heuer are also in the markets with their smartwatches. In the LVMH Group, the development of the smartwatches, is being taken care of the internal development unit.This is also the way the Group can have efficient R&D expenditures. 

It is estimated that the global smartwatch sales would exceed 141 million units this year, while the estimates for the last year were 75 million units. In 2016 the sales were 38 million units.

Hublot was the first luxury brand to invest in football and has partnered with football for over 10 years and the company has different brand ambassadors like Pele, Usain Bolt, Dwyane Wade, Justin Rose, Dustin Johnson and Lang Lang.

The company has worked with the luxury car manufacturer Ferrari for many years and according to Mr Guadalupe some kind of connected smartwatch with Ferrari might be one option in the future.. The autonomous, connected cars can have also new innovations for smartwatches.

-When we work with smartwatches, it is good to remember that it is totally different market compared to mechanical watches, which is our core business. But working with wearables we want to show the innovative, unique and piece of art work in our products, he says.

The launched Hublot Big Bang Referee smartwatch enable users to take part in the FIFA game by sending them notifications and live score updates.The company says they have produced 2000 units of this watch so far.

Hublot and sustainability

As part of the LVMH Group, Hublot has also developed tools to track for example the raw materials in the luxury watches. Sustainability is becoming more common and part of the luxury watch industry processes more.

-We use different raw materials like gold, diamonds and titanium in our products. Sustainability means for us that we track the sourcing of the materials as good as possible and want to expand that analysing and recycling also in the future, he explains.

Quality, passion and details

But what does the CEO do at home?

-I am a football fan and therefore it is a pleasure for me to work in collaboration with FIFA. This is a third World Cup for me. And when I am at home, I like to cook. Gastronomy is my hobby as well  You know: it is like watch making: quality, passion and details, he says.

© Päivi Härkönen, ComteamPUB+

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