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First acquisition Boussac
Transcript of First acquisition Boussac
Dismantling of Boussac group
Selling factories and companies pieces by pieces
Closing the rest -> lots of lay-off
French fabric firm created in 1911
It owned newspaper, factories of fabrics, le Bon Marché, Couture Dior and perfum
1978 first sell because of economics problems
In 1981 the company is going into receivership
1984 Bernard Arnault buys the company
Keeping only Dior couture, Dior Perfum and le Bon Marché
Old, famous, and admire brand, world known dressmaker (Christian Dior)
But not money making
First aquisition: Boussac group
Dior's house used to do only "haute couture"
Dresses are very expensive to create (each dress is unique, a piece of art)
Prices are very high and so the customer base is very small, only the very high class
Dior is losing money
Transition in Dior strategy
Keeping the company value
of excellence, quality, creation, and innovator in fashion;
Keeping "haute couture" to keep the image;
-> Find another way to make money
The solution develop accessories
Completely novatrice idea (visionary)
Less expensive than haute couture's dresses so easier to sell
Overcome the reluctance to change
See as a deterioration of the brand's image by employees and customers;
There is no need to create a
sense of urgency
they know that Dior is loosing money and can not continue this way or it will be dismantle
Challenge open the brand to a wider consumer base and at the same time keep it image of absolute luxury.
First one to include them there;
Put bag and accessories in fashion show as they use to do with dresses;
Like is it "haute couture";
Accessories on catwalk
... public figure to embody the brand image and value
The lady Dior is an example of perfect marketing for hand bag;
Nowadays it is still a best seller;
Introduction of LVMH
First Acquisition: Boussac group
Transition to the Asian Market
French multinational luxury goods concern
founded in 1987
portfolio of over 60 prestigious brands
110,000 employees worldwide throughout 3,000 stores
Wines & Spirits
Fashion & Leather Goods
Perfumes & Cosmetics
Watches & Jewelry
Bernard Arnault bought Boussac in 1984
LVMH was founded in 1987 by the merger of Louis Vuitton with Moët Hennessy
become the world leader in luxury goods
Louis Vuitton: expand its investments in the luxury business
Moët Hennessy: saving from the threat of takeover
autonomy of each company over its own management and subsidiaries
Represent Western "Art de Vivre" around the world
The way to success:
-> Be the best in all they do!
Chief executive officer
Five main sectors
stores all over the world
diversification of luxury goods
strengthen its position on the world market of luxury products
Bernard Arnault (owner of Dior) should support Henry Racamier whereas Guiness should help Alain Chevalier but in the end they both became the enemies
Henry Racamier and Alain Chevalier left the company
Bernard Arnault became the CEO of LVMH
LVMH'S "Pivot to Asia"
L Capital is the third party private equity and real estate funds business sponsored by LVMH.
Invests and help portfolio companies build their brands by being operational and strategic partner to the companies in its portfolio.
Observes and strive for better understanding the Asian market for LVMH
Its offices are located in Mauritius, Singapore, Mumbai and Shanghai
LVMH and L Capital Asia
Entering Asian market through...
1. Buying shares of local companies.
(closely related to culture)
2. Exercise decision making power and get involved with
developing market strategies.
3. Share Asian consumer data.
4. Collaboration with the local corporates.
In summary: Glocalization
Case studies diversification of the activity
Case#1 : Singapore, Chrystal Jade
LVMH, has recently acquired Singapore-based Crystal Jade restaurant chain for around $100 million.
Crystal Jade includes a mix of Chinese fine dining, casual dining, and specialty restaurants.
The deal will give LCapital Asia, the private equity division of LVMH, a 90 percent stake in the restaurant group. With over 130 restaurants in over 10 countries in Asia.
Case studies Training futur LVMH's executives
Case studies on entering Asian market
Case studies on entering Asian market
Case#2: Fostering more talents in Asia
- Opened up managerial training center to foster Asia professionals
- Luxury conglomerate LVMH Moët Hennessy on Thursday opened a managerial training center in Singapore, its first outside of Europe. The LVMH Asia-Pacific Talent Development Center will focus on developing management talent in Singapore, Hong Kong and Shanghai.
Case#3: Become share holders of the local companies
- Acquires shares of local Asian companies through L Asia
- LVMH has acquired a 10% stake in Chinese fashion maker Ochirly
-> a sign that global retailers are keen to tap the huge potential of China's middle-class consumers.
2) Korea_ YG Entertainment
- The private equity arm of French luxury goods giant LVMH invested up to $80 million in South Korea's YG Entertainment Inc .
-Planning to launch a joint venture fashion brand with Samsung Group fashion unit Cheil Industries this quarter. (Collaboration)
Into Asian culture
Case: Korea _ YG Entertainment.
One of the big 3 entertainment companies exercising major boost in "Korean Wave" all over South East Asia, and all over the world
By becoming operational, strategic partners
Group Collaboration_ Win-Win Effect
Bernard Arnault and Guiness increased the mutual holdings
LVMH concentrated also on the retail (luxury department stores)
Investments in Sephora, holdings in Hermès and bought Bulgari
Investment in the Asian market
Problems between the management of Louis Vuitton (Henry Racamier) and Moët Hennessy (Alain Chevalier)
Conclusion of Dior transformation
Change in products, consumer based.
Success reach through marketing oriented strategy.
Dior survived to the disappearance of Christian Dior, it keeps innovating, rejuvenating but as the same time keeping is identity with John Galliano.
Dior's success help Arnault to get the banker confidence and respect in the fashion world and lead him expand with LVMH
Why "pivot to Asia"?
Why "pivot to Asia"?
Asian market strategy.
Dealing with the fake luxury:
Prevalence of fake luxury in chinese market
ex: signing agreement with chinese e-commerce tycoon Alibaba in order to prevent sales of counterfeit products
- Emphasis on "vintage" image:
Stressing the importance of vintage image in order to promote brand heritage
- Diversifying products through branching :
launching new products to seep into various markets
ex: LVMH launching fashion brands, perfume, umbrella
Case Study : China
- Adapting the new market.
- Managing market transitions
Strategies coping with transitions
Touching a large amount of consumer
Covered by media