THE 2019 FINANCIAL DIGEST FOR BEAUTY AND FASHIONCulture
As we come to the end of the year, it’s no surprise to hear that many companies, across the fashion and beauty industries alike have made some big migrations during 2019, which include huge acquisitions that may change the way our favourite brands operate in the new year.
Continue reading to find out our budget breakdown for the biggest fashion and beauty acquisitions from 2019, so you can instantly overwhelm your future casting directors with your industry knowledge.
LVMH BUYS TIFFANY IN $16 BILLION DEAL
Recently in Paris, the American jeweller Tiffany & Co made a deal with LVMH which was an all-cash transition that is intended to boost the French’s luxury giant’s watches and jewellery division, so they can help strengthen their position in the US market.
However this wasn’t the first time LVMH — Europe’s second-most valuable company, with a market capitalisation surpassing €200 billion — had set its sights on Tiffany.
The conglomerate reportedly expressed interest in the jeweller prior to its takeover of Bulgari in 2011 —LVMH’s last major investment in hard luxury.
Consequently LVMH’s shares were up nearly 2% last week, proving that it’s it’s safe to assume this was a forward-thinking move for the luxury goods company.
KYLIE SELLS THE MAJORITY SHARES FOR HER COSMETICS BUSINESS TO COTY
Earlier this month, Jenner kept up with the billionaires by selling $600million for a majority stake in the cosmetics brand. This deal however ensured that Kyle stays on as the face behind the brand and handles all creative direction, which is probably a good decision for all parties, considering she has over 270 million social media followers and is at the vanguard of beauty influence.
So what’s next? Well Jenner’s company currently sells only make-up and skincare products but Coty will license fragrances and nail merchandise too.
As a result, if her new parent can broaden her brands appeal into everything from false eyelashes to gel nail varnish and more, Kylie will continue her status as one of the most successful business entrepreneurs of her generation!
WHY RIHANNA’S FENTY BRAND WAS SUCH AS BIG DEAL
In may, we witnessed a ground break deal as Rihanna teamed up with LVMH to launch a new fashion label.
The deal shows how LVMH is breaking the mold of how luxury brands are built and signals dramatic changes coming in the luxury market led by the undisputed market leader.
This milestone however is also very different from other acquisitions typically applied by the holding company who mainly builds its brands by acquiring them outright; rarely does it launch an original brand on its own. (The last time it did this was in 1987 when with Christian Lacroix, which it sold in 2005.)
Rihanna, has also become the first, black female to partner with LVMH on creating a new brand from the ground up. She is also the first woman of color to lead an LVMH brand—two milestones that have taken up to now to achieve.
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LVMH is deeply engaged with promoting female empowerment and supporting the multiple creative ways in which our Maisons contribute positively to this issue. Fenty unveiled its new collection inspired by the beautiful antique jewel : the cameo. Made of rings, pendants and pair of earrings, this collection shows how the cameo can be the symbol of fearlessness, elevation, creativity and joy, that being all the special features of the Maison. For this occasion, black women have been gathered to wear proudly these jewels in front of the Nigerian photographer Ruth Ossai who captured the moment and highlighted the beauty of both women and cameos. This is a way for Fenty to honor a new contemporary heroine. #FENTY #LVMH
THE ESTEE LAUDER EMPIRE CONTINUES TO EXPAND
The leading beauty manufacturer and marketeers, whose portfolio already includes a number of icons brands across skincare, makeup, fragrance and hair care labels, has announced the acquisition of Have & Be Co.LTD which is expected to close before the new year.
The Seoul-based, global skin care company, Have & Be includes skincare label Dr. Jart+ and men’s grooming brand Do The Right Thing. The purpose of this partnership is to help strengthen the company’s reach in the Asian, North American and United Kingdom markets, as well in travel retail.
Fabrizio Freda, president and CEO of the Estée Lauder Companies, said in a statement:
As the company’s first acquisition of an Asia-based beauty brand, Dr. Jart+’s focus on creating high-quality skin care products that fuse dermatological science, incredible innovation capabilities and artistic expression make it a terrific, strategic addition to our diverse portfolio of prestige beauty brands. We look forward to continued global growth in the years to come.
CHANEL INVESTS IN GREEN AND THE FUTURE OF IT’S CRAFTS
Following in the footsteps of other major fashion houses, Chanel has announced it’s support for Evolved by Nature, an American start-up company which is specialised in the silk industry and uses eco-friendly production methods.
Earlier in May 2019, the fashion house confirmed they will stop using exotic animals skins and furs. This includes materials such as crocodile, lizard, fish and snakeskins. One of the firm’s most impressive inventions is Activated Silk ™, a liquid silk solution that can be combined with other materials to create innovative textiles, all while respecting the environment.
Meanwhile in 2019 Chanel also bought minority stakes in two Italian leather goods makers and a French clothing manufacturer in a bid to bolster the speciality ateliers that make up its supply chain. Building out its network of artisans cost the business $169 million (£138 million) when the deal was made in January.
The new acquisitions consist of Renato Corti, one of Italy’s largest leather manufacturers based in Florence and Milan, and Mabi, which produces luxury handbags in factories in Florence and San Daniele. Chanel now holds a 40 per cent stake in both. The French company Grandis, which the house bought a 34 per cent stake in, is comprised of 12 workshops creating tailoring, lingerie, swimwear and leather.
The investments secure Chanel’s place at the top of the luxury leaderboard, but beyond that the house is striving to preserve the know-how of the unique manufacturers that are central to fashion’s craft.