LVMH: The secrets of this refuge value
After the conclusion of its luxurious marriage with the jeweler Tiffany, the number one in French luxury is once again proving its resilience in the face of the health crisis. This success also benefits the Chairman of the Bernard Arnault Group, who is starting the new year with confidence after having himself purchased LVMH shares for 10 million euros last December.
While more than a year of negotiations and developments have just been concluded with the acquisition of the American jeweler Tiffany by the French luxury giant LVMH, this safe haven ended the year 2020 with a very satisfactory result.
The Chairman of the LVMH Group, Bernard Arnault, begins this new year with confidence. He was named “manager of the decade” on November 30 by the news channel BFM Business. A few days earlier, LVMH had reached a market capitalization of 250 billion euros on the Paris Stock Exchange, erasing France Telecom‘s historic record in 2000.
On Wednesday, the investment bank Jefferies raised its target share price for the LVMH group from 455 to 590 euros. Its forecasts were revised upwards after adding the earnings of jeweler Tiffany, with which LVMH has just completed the merger.
The office also forecasts a sharp increase in the Group’s retail, beauty, and hotel sectors between now and 2020, due to the potential concentration of the French giant on these sectors, which have been weakened by the health crisis.
But what is the secret of this infallible resilience? According to Bernard Arnault, if the group is accustomed to unfailing success, it is mainly due to the weight of the group, the diversity of its activities, its overall geographical distribution, and its family management.
LVMH also owes this record market capitalization to its full awareness of industrial realities. The automation of activities at Louis Vuitton allows the company to grow and shrink in line with market demand and ensures consistent quality.
In addition, Louis Vuitton has been able to acquire reliable suppliers of raw materials, thus ensuring the continuity of the supply chain throughout the health crisis. Its numerous training programs provide it with a highly qualified workforce.
The strength of the LVMH Group also lies in its numerous acquisitions and mergers, and its extensive brand portfolio. From fashion and leather goods to selective distribution, including wines and spirits, the world leader in luxury goods claims excellence in all areas.
The group has also demonstrated its relevance during the past year. Indeed, while LVMH could boast that it is one of France‘s leading employers and one of the top taxpayers in terms of corporate income tax (with 1.4 billion euros paid to the tax authorities in 2019), the year 2020 proved that the group knew how to make itself indispensable in a crisis situation.
Between the creation of an air corridor between France and China to transport masks, the emergency production of hydro-alcoholic gel in industrial quantities, and the financing of hospitals and medical research, the various actions are taken to help the country have been welcomed by all.
Finally, the LVMH Group concludes this year 2020 by having demonstrated its infallible management, even in times of crisis, as well as its social usefulness at crucial times.
Read also > ANTHONY LEDRU NOMINATED AS HEAD OF TIFFANY
Featured Photo : © LVMH
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