LVMH is exploring sales of fashion houses, beauty labels and alcoholic drinks brands in one of the most significant retrenchments of its near 40-year history, as the luxury industry leader slims down in response to a period of lower demand.
The businesses LVMH had put up for sale included fashion label Marc Jacobs, its stake in singer Rihanna’s Fenty Beauty brand and US wine producer Joseph Phelps Vineyards, said people familiar with the matter.
The potential deals, which altogether could net LVMH billions of euros to reinvest in its business, would come on top of multiple recent disposals.
Within the past 18 months the group controlled by billionaire Bernard Arnault has offloaded Off-White, the luxury streetwear label founded by late designer Virgil Abloh, the Greater China business of travel retailer DFS and its 49 per cent stake in Stella McCartney’s eponymous fashion label.
The push to sell these mainly underperforming businesses forms part of a cost management drive across LVMH, which owns more than 75 brands spanning high fashion to cognac, hotels and newspapers.
The group is refocusing on major profit drivers such as Louis Vuitton and Dior, where sales have slowed since 2023 as a pandemic-era boom in luxury goods reversed. A squeeze on disposable incomes of the so-called aspirational luxury consumer and a run of inflation-busting price rises by top brands have combined to depress demand.
Bernstein analyst Luca Solca said: “LVMH is clearly looking at their portfolio to see what is not performing, what is dragging on margins, because they are in a time when the pressures on the business are higher.”
LVMH declined to comment.
The asset sales are a break from tradition for Arnault, who built LVMH into one of Europe’s biggest companies through acquisitions.
Since 2000 the Paris-listed group has made 206 takeovers, according to Dealogic, including big-ticket deals including the $16bn purchase of US jeweller Tiffany in 2020 and a €3.7bn ($4.3bn) deal for Italian jeweller Bvlgari in 2011.
Over the same period LVMH sold 122 assets, mostly on a smaller scale, such as New York fashion brand Donna Karan and shirt seller Thomas Pink.
“It is the first time in the history of LVMH that they are more in the downsizing mode than increasing the size of their portfolio,” said a luxury analyst. But with limited debt and free cash flow of over €11bn last year, LVMH is unlikely to be in a rush to sell.
Senior directors at drinks business Moët Hennessy, LVMH’s worst-performing division in recent years, are sounding out buyers for brands including Eminente rum and Joseph Phelps wineries in California, according to sources close to the company.
Further disposals in LVMH’s travel retail business were also under consideration, the people added.
“Whenever we have an underperforming brand, the first priority is to fix them,” Cabanis said on LVMH’s earnings call last month. “If in some cases . . . we have a discussion with an operator where we believe it will be the good place for the brand to land, then we make a deal,” she added.
Deals could also be forthcoming in LVMH’s beauty portfolio. The group is exploring sales of dated brands Make Up Forever and Fresh, according to people familiar with the matter, which would help refocus LVMH on upscale labels like Dior Beauty and Guerlain. The people added that the group was also considering a disposal of its 50 per cent stake in Fenty Beauty, which JPMorgan values at between €1.5bn and €2.5bn.
LVMH’s top deals since 2000
Top Acquisitions
Tiffany & Co, 2019. Value: $16.2bn
Christian Dior Couture consolidation, 2017. Value: $7.1bn
Belmond, 2018. Value: $3.1bn
Bvlgari, 2011. Value: $3.1bn
Loro Piana, 2013: $2.6bn
Top sales
Hermès International minority stake, 2014. Value: $9bn*
Gucci Group minority stakes, 2001. Value: $1.8bn*
Donna Karan International (DKNY), 2016. Value: $650mn
DFS Greater China operations, agreed 2026. Value: under $395mn
Pommery Champagne, 2002. Value: $202mn
*Exits after aborted takeover attempts
Meanwhile the future of Marc Jacobs, the eponymous LVMH-owned fashion house, is unclear. The group was in advanced talks to sell the label to Authentic Brands Group for about $1bn, only for negotiations to break down, according to people familiar with the discussions.
Disposals outside LVMH’s core product categories are also being considered, such as Le Parisien, the lossmaking but influential newspaper LVMH acquired in 2015.
Arnault’s younger sons, Frédéric and Alexandre, have pushed their father to sell it to billionaire Vincent Bolloré, who has reportedly shown an interest in the publication, according to people close to the situation.
But their elder siblings Antoine and Delphine have warned that a sale to a prominent businessman, who is perceived as staunchly rightwing, could be politically problematic in the run-up to a fraught presidential election.
Even as it explores asset sales, LVMH remains in the market as a potential buyer. The group is considering whether to bid for a minority stake in Armani after being named as one of three preferred buyers in the will of its late founder, Giorgio Armani.
A person close to the situation said a consensus has not been reached inside LVMH over a deal: “It would be a huge overhaul project and massive investment of capital over at least five years to get it to work,” they said.
Arnault, who recently batted away questions about whether he would soon step down, has also sought to project confidence in LVMH’s future by purchasing hundreds of thousands of shares this year. The Arnaults, France’s richest family, own about 50 per cent of the company.
“We’re entitled to acquire a bit more,” Arnault said in January. “We believe in what we do, and we’re showing it in that way.”