Business

LVMH expands its empire with Italian tannery acquisition

By Eva Morletto31 mai 2023

LVMH has acquired a majority stake in the Italian tannery Nuti Ivo, strengthening its position in artisanal production chains. While this move offers opportunities to local artisans, it may threaten smaller brands by monopolizing the supply chains.

Luxury groups' acquisitions of local artisans create new opportunities for craftsmanship excellence but risk isolating small brands by interrupting their supply chains to fine crafts (Shutterstock)

After months of speculation in the Italian media, such as the financial newspaper Sole 24Ore and La Nazione, LVMH Métiers d'Art, the sector of the French luxury group that holds stakes in artisanal production chains, has officially announced its acquisition of a majority stake in Nuti Ivo, one of Italy's most prestigious tannery.

Located in the Santa Croce sull'Arno region near Pisa, Nuti Ivo specializes in the processing of bovine leather for major fashion brands. In 2021, the tannery achieved sales of €58.7 million, with a net profit of €8.65 million. It is part of a family-owned group that owns seven tanneries in the region, generating total annual sales of €130 million. The four production facilities in Tuscany employ a total of 300 employees. In a press release, LVMH described the Italian company as an "example of excellence in leather manufacturing, linked to an important tradition and know-how."

Nuti Ivo, which exports 85% of its production, has already been a major supplier to LVMH for years. Matteo De Rosa, head of LVMH Métiers d'Art, explains that the acquisition by the French group provides new opportunities for local artisanal excellence and that the resources deployed by the luxury empire can prevent these businesses from facing difficulties in an increasingly international market.

While these claims are plausible, it is also true that the increasingly significant involvement of luxury conglomerates in businesses considered pillars of the supply chains undermines small fashion brands and minor players in the industry. They risk gradually losing access to artisanal crafts due to the expansion of large groups.

Since 2019, LVMH has already held a 20% stake in another tannery in the region, Masoni Industria Conciaria, and has also acquired an equity stake in another company in the sector, Ulivieri&Nardi.

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