In 1987, the merger of Louis Vuitton with famed French spirits, champagne, and perfume group Moet-Hennessey marked a new era of consolidation in the luxury-goods industry. The newly formed Louis Vuitton Moet Hennessey (LVMH) instantly became the worlds largest luxury goods company, raking in $4 billion in revenues in 1991. The company continued to grow in the 1990s by acquiring a number of other luxury-goods companies, including fashion label Christian Lacroix and shoe designer Berluti in 1993, TAG Heuer watchmaker in 1999, and the Donna Karan brand in 2000. Today, LVMH has a portfolio of 50 luxury brands and is the number one worldwide seller of champagne, cognac, fashion and leather goods, and the number three worldwide seller of perfumes and cosmetics. The companys revenues topped $10 billion in 2000.
Here are some of the famous luxury brands LVMH controls:
Champagne, Wine, Cognac, And BrandyLVMH also owns several business and financial media publications, including La Tribune newspaper, and two art magazines. The company owns all or part of a number of retail franchises, including the Sephora chain of cosmetic stores, DFS Group duty free shops, Miami Cruiseline Services duty free shops, and French department stores Le Bon Marche. Other businesses the company owns include auction houses Phillips, de Pury & Luxembourg and Etude Tajan, Omas luxury pens, and a development capital business called LV Capital. LVMH maintains an Internet presence (www.lvmh.com), but its website is mostly informational. It does, however, feature an e-commerce site called eLuxury, which debuted in June 2000 and in which LVMH is a principal investor. The site strives to maintain an "exclusive" image by prohibiting advertising, providing editorial content on trends, travel, and entertainment, and partnering with more than 60 luxury brands.
- Moet & Chandon
- Dom Perignon
- Christian Lacroix
- Louis Vuitton
- Donna Karan
- Christian Dior
- Hard Candy
- Urban Decay
- Tag Heuer
Recently, Louis Vuitton built several flagship concept stores located on high-fashion avenues around the world like Rodeo Drive and Fifth Avenue. These stores sell an estimated average of $1,800 per square foot. Some of the best-selling stores sell as much as $8,000 per square foot. Additionally, since maintaining an upscale image is vital to a luxury brand, LVMH devotes over ten percent of annual sales to promotion and advertising. The company advertises its brands primarily in fashion and lifestyle publications. Some of the leading brands sponsor major international events with luxury cachet, as Louis Vuitton does by sponsoring the Americas Cup. Since image is an essential part of marketing luxury goods, LVMH is careful to evaluate every advertising and promotional opportunity for consistency with the image of its brands. As a result, the company manages a portfolio of luxury brands unparalleled in both size and sales.
(Sources: William Echikson. "Luxury Steals Back." Fortune, January 16, 1995; www.lvmh.com; www.eluxury.com;; Thomas Kamm. "Latest Fashion." Wall Street Journal, December 28, 1987; Lisa Marsh. "LVMH Thinks of Vuitton Globally, Acts on 5th Ave." New York Post, December 5, 2000; Joshua Levine. "Liberté, Fraternité But to Hell with Égalité!" Forbes, June 2, 1997.)