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In a post-Covid luxury industry, why will mergers and acquisitions multiply?

In a post-Covid luxury industry, why will mergers and acquisitions multiply?

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At this complicated beginning of the year, many observations can be made regarding the financial strategies implemented by the luxury industry players. Companies are experiencing a slight economic recovery and are preparing to start the year 2021 in the best possible way, notably with mergers and acquisitions. Analysis.

The pandemic will have hit the luxury industry hard, particularly in the fashion and luxury goods sector. Few brands will continue to be independent apart from Chanel, Hermès and Rolex according to Erwan Rambourg, who wrote “Future luxury” and Managing Director and Global Head of Consumer and Retail Equity Research. Indeed, most of them will either go bankrupt, be acquired or merge with others.

As for the major brands that go bankrupt, they never disappear permanently, they convert or reappear under another name or new ownership. This is the case, for example, of Barneys which, after going bankrupt and being bought out by Authentic Brands, plans to open a unit in 2021 located in the New York flagship of Saks Fifth Avenue.

The last quarter of last year was also marked by three of the largest acquisitions, one of which was the largest transaction ever made in the luxury goods sector: in October, the acquisition of Tiffany and Co by LVMH for $15.8 billion.  In November, VF Corporation, owner of Timberland, Vans and The North Face, purchased the Supreme streetwear brand for $2.1 billion. And finally, in early December, Moncler acquired the Stone Island men’s clothing brand for $1.4 billion.



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Featured photo: © Moncler

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