LVMH balancing financial strategy and new developments

Eva Morletto

By Eva Morletto14 septembre 2023

LVMH is on multiple fronts. While Birkenstock (LVMH) is preparing for its debut on the New York Stock Exchange, Bernard Arnault is making substantial investments in LVMH through strategic stock purchases. Simultaneously, rumors of Alessandro Michele potentially joining LVMH have been circulating during New York Fashion Week.

Birkenstock, valued at over 7 billion dollars and has quadrupled its sales in eight years, is reinforcing its status thanks to collaborations with luxury brands such as Dior, Givenchy, and Manolo Blahnik. Here is a collaboration with Dior, Dior men CD 1947 capsule (Birkenstock - Jackie Nickerson)

From the vibrant New York and its fashion week, a persistent rumor has been spreading: Alessandro Michele, the former creative director of Gucci whose departure made headlines, might be joining the LVMH empire. While this idea has been circulating for some time, it gained momentum this week around the New York runways. The Bernard Arnault Group has not commented on the matter thus far. However, there is speculation that Bulgari could be the house chosen for Michele, given his passion for jewelry.

In parallel, Birkenstock, of which the majority of shares were acquired in 2021 by L Catterton, co-founded by LVMH and Bernard Arnault, along with Financière Agache, his family holding, is preparing for its debut on the New York Stock Exchange. The German sandal manufacturer is on an upward trajectory: according to the Wall Street Journal, shareholders are aiming for a valuation of over $7 billion for the company. In the filing submitted to the New York Stock Exchange, details about the number of offered shares remain unclear. The brand's resounding success is reflected in its revenue, which has quadrupled in eight years. Its collaborations with prestigious names like Dior, Givenchy, and Manolo Blahnik have only bolstered its status. The financial results for the last fiscal year, ending in September of the previous year, showed a global revenue of €1.24 billion and corresponding net profits of €187 million. Additionally, a brand-new factory is currently under construction in northern Germany.

In tandem with Birkenstock's IPO, Bernard Arnault has continued to purchase LVMH shares, totaling approximately €215 million. This gradual strategic purchase comes after a notable -14% decline in the share price since July. Traditionally, insider purchases are seen as a sign of confidence in the future prospects of a publicly traded company. The recent drop in LVMH's stock provided Bernard Arnault with an opportunity to invest at more favorable valuations.

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