An iconic United States company with a storied history, the jeweler Tiffany agreed Monday to be acquired by French luxury giant LVMH for $16.2 billion. "It has lots of potentials and an incredible history".
Tiffany, founded in NY in 1837 and featured in the 1961 movie "Breakfast at Tiffany's" starring Audrey Hepburn, had struggled with falling annual sales and profit since 2015, before a revenue turnaround in 2017. Arnault spoke to Trump at the opening of a Louis Vuitton leather factory in Texas last month, two days after he dispatched a top executive to propose a deal to Tiffany's chief executive. The strong dollar has also made Tiffany products more expensive for consumers outside the U.S. Arnault is the richest person in the fashion industry.
"When you buy a attractive dress, it's rare that after a few dozen years this dress will still seem contemporary", he said.
Such a deal has been seen as way forward for Tiffany, which has trailed rivals in terms of sales growth in recent years.
LVMH's portfolio consists of 75 brands including Christian Dior, Louis Vuitton, and Hennessy. Bogliolo is well acquainted with LVMH, having been CEO of Bulgari during LVMH's acquisition of the brand.
Flavio Cereda, an equity analyst at Jeffries, stated in a note prior to the deal announcement that Tiffany's "brand equity and the strength of the image of its iconic 1837 Blue Box are more valuable than the current financials suggest".
Tiffany will help grow its smallest business, give it a bigger share of the lucrative USA market and expand in jewelry, the fastest-growing sector in the luxury goods industry.
Arnault, 70, has already flirted with second place, as earlier this month he snuck into the number two position, with a $107 billion fortune to Gates' $106.9 billion at the time, reported Forbes.
Tiffany reportedly entered preliminary discussions with LVMH and asked the company to up the bid, which it raised to $130 per share.
"Some companies in the retail sector have complained about softer demand, but luxury brands tend to hold up well when economies cool as the mega rich usually fare better in a cooler economic climate", said market analyst David Madden at CMC Markets UK.
Tiffany said in a joint statement with LVMH that its board of directors recommended shareholders approve the transaction.
The companies said they expected to close the deal in mid-2020.
Arnault said that LVMH intends "to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons".
