Thursday, 1 April 2010

We Give You The Low Down On Luxury Mergers And Acquisitions – 1/4/10

Swatch and Bulgari may not be in buyout talks (see yesterday’s MO Down), but they have us (and the rest of the world) pondering other merger and acquisition (M&A) options and hypotheticals in the luxury industry.

We found an excellent Reuters article that provided a detailed overview of the current state of M&As, which shows some European brands have already been sold to buyers from emerging markets, including Asian companies or wealthy individuals.

We found this comment particularly interesting: "Another contributing factor to an M&A pick-up is the weaker euro which should make European brands more attractive to foreign buyers, particularly from regions such as China, Japan, India, Russia and the Middle East”, according to M&A advisers.

Another thought-provoking insight was that, “Potential buyers in China want to get a share of the big profits European luxury companies make by selling products in their fast-growing home market, while Japanese buyers are looking to tap regions outside their stagnant economy.”

Some of the M&As we’ve already explored on the MO Down include:
• The resurrection of German brand MCM (formerly known as Michael Cromer Munich) by Korean business woman Sung Joo Kim. Click here to read our earlier report.

• German brand Escada was bought by Megha Mittal, the daughter-in-law of ArcelorMittal Chief Executive Lakshmi Mittal. Click here for more details.

We must also note that Lanvin, the iconic French brand that has had a wonderful rejuvenation in recent years thanks to the creative director Alber Elbaz, is owned by a holding company Arpege SAS. The majority owner, Shaw-Lan Wang, a Taiwanese media magnate, found a silent partner in November 2009 to assist in further growing the company and hopefully keeping the other luxury conglomerates at bay for a while... so there’s no hostile takeover in sight right now.

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury,