Pretty Purchase: LVMH and Off-White Deal​

By Curtley Bale​
The Story
Last week, LVMH expanded its luxury fashion empire with the acquisition of a majority stake in fashion label Off-White. The French conglomerate, headed by the world’s second-richest man Bernard Arnault, has acquired a 60% stake in Off-White, with founder Abloh retaining 40% and continuing on as creative director.

Off-White was founded in 2013, and is known for its trendy streetwear with its iconic red cable tie logo - which often sells out at breakneck speeds.

What it Means for Businesses and Law Firms
LVMH, which owns brands such as Louis Vuitton, Moët & Chandon, and Christian Dior, is one of Europe’s largest companies by market capitalisation, worth approximately €327.54 billion. This deal comes as LVMH looks to continue its dominance, by adapting to current market trends. Whilst its brands continue to do well, there is a growing demand for luxury streetwear. Off-White has fostered a culture of hype around its products - in part due to their scarcity and their vast potential for resale value. Additionally, collaborating with iconic brands such as Supreme and Nike has made Off-White a household name amongst younger consumers. It is this demographic that LVMH likely wants to tap into.

In return, the acquisition means that Abloh will benefit from enormous economies of scale, due to the huge global presence of LVMH. As such, it will be easier for Off-White to grow as a brand via LVMH’s established channels in global markets - as opposed to entering these markets from scratch. Both Abloh and LVMH cited these reasons as key drivers for the deal (LVMH). LVMH’s global footprint was also the reason behind recent partnerships with other celebrities, including Jay-Z’s Armand de Brignac and Rihanna’s Fenty Beauty.

LVMH’s acquisition of a 60% stake in Off-White seemed like a natural progression from their current working relationship. Abloh began working with LVMH in 2018 as the artistic designer for the Louis Vuitton division, and is now looking to lever his relationships for the success of his own brand. For example, Abloh is well known for his friendship with Kanye West, and his visions behind West’s Yeezy brand. Louis Vuitton’s CEO has likened Abloh to Karl Lagerfeld in terms of his artistic capability and disrupter mindset (Financial Times). LVMH likely intends to utilise Abloh’s capabilities to launch new brands, whilst also taking existing brands “beyond the realm of fashion” (LVMH).

Image Credit: andersphoto/Shutterstock.com
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