LVMH moves into travel by buying Belmond for $2.6bn
Consumers with cash to spare are moving towards trips, health clubs, restaurants and entertainment, as interest in shopping malls dwindles
Paris/Tokyo— LVMH is making a $2.6bn bet that the same consumers who can spend $1,000 on a Louis Vuitton bag will splash out for a $2,000-a-night hotel on Italy’s Amalfi Coast. The French luxury giant agreed to buy Belmond, owner of New York’s ‘21’ Club and high-end resorts around the world. The transaction is LVMH’s largest since taking full control of Christian Dior for more than $7bn last year and pushes the company further into services amid rising concern about the sustainability of the Chinese demand that’s driven fashion industry growth. LVMH agreed to pay $25 a share in cash for London-based Belmond, a 42% premium over its closing price in the US on Thursday. The Paris-based company’s shares fell as much as 3.1% early on Friday. The acquisition is one of LVMH founder Bernard Arnault’s biggest, rivaling the purchases of Bulgari and Loro Piana. It comes as consumers shift spending towards trips, health clubs, restaurants and entertainment, and interest in shopping malls dwindl...
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