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The LVMH–Bulgari agreement: Changes in the luxury market that lead family companies to sell up
Journal of Brand Strategy,
1
(4),
389-402
(2012)
Abstract
On 7 March, 2011, the world-leading luxury group LVMH acquired a majority stake in Bulgari, a famous Italian jewellery house. The deal reflects a major revolution that is occurring within the whole luxury sector: the transformation of manufacturers of rare products into creators of exceptional branded retail experiences Furthermore, as luxury companies expand their businesses into Brazil, Russia, India, and China (the BRIC countries), particularly China, the demands of these huge new markets put great financial and managerial pressures on family-owned companies. The purpose of this paper is to analyse the LVMH–Bulgari deal from interrelated marketing and financial–strategic perspectives, and to show why companies that once insisted they would remain family-owned have had to abandon this policy and join luxury groups instead.
Keywords: luxury; mergers and acquisitions; brand dilution; family companies; China; retail experience
The full article is available to subscribers to the journal.
Author's Biography
Jean-Noël Kapferer is an internationally renowned authority on luxury. A doctorate holder from Kellogg Business School (USA), also HEC Paris emeritus professor, he now conducts research on the transformations of luxury at INSEEC School of Business and Economics. He is co-author of the luxury CEO’s reference book The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands and of Advances in Luxury Brand Management, and author of How Luxury Brands Can Grow yet Remain Rare. He publishes extensively in the best international journals and is Honorary Editor of the Luxury Research Journal. Advisor to the Luxury Business Institute (Seoul and Shanghai) he is an active consultant and leads executive seminars all around the world.
