Louis Vuitton takes on Bulgari

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What happens when you are a luxury wristwatch and jewelry brand and your CEO tries to save money during a recession by not polishing their $10,000 wristwatch product to save a few cents and then is smart enough to show the dull underside to a New York Times reporter?

You end up selling your controlling stake to a larger company hoping that they will turn it around which is what Bulgari ended up giving to French luxury goods maker LVMH Moet Hennessy Louis Vuitton in a deal worth about 3.7 billion euros.

LVMH had also recently built up a 20.2 per cent stake in Hermes which prompted an internal rebellion by family members within that company. LVMH hoped that this Bulgari deal would show Hermes that it can work well with family controlled business even though I think the only reason Bulgari caved was because they had run out of ideas.

related links

LVMH to acquire Bulgari for 3.7 bln euros
LVMH shows that it can work with family businesses
Bulgari’s PR Blunder

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