LVMH Moet Hennessy Louis Vuitton SE agreed to acquire a controlling stake in German luggage maker Rimowa GmbH, paying 640 million euros (US$715 million) for a company whose aluminum suitcases are used by celebrities such as Kanye West and Kim Kardashian.
The world’s largest luxury goods maker is acquiring the 80 percent holding from Dieter Morszeck, grandson of the Cologne, Germany-based company’s founder, LVMH said yesterday.
Alexandre Arnault, the 24-year-old son of LVMH chairman Bernard Arnault, is to become the brand’s co-CEO, his first big job at his father’s group.
Rimowa’s grooved suitcases have become a common sight in airport security lines, being used by celebrities including Will.i.am and Gwyneth Paltrow.
Selling for as little as US$400, the cases are less of a luxury than LVMH’s Louis Vuitton, whose trunks typically cost thousands of US dollars.
Founded in 1898, Rimowa’s growth has outpaced the broader luggage market’s 5 percent expansion over the past five years, an LVMH spokesman said.
“LVMH is looking for brands that have heritage and a unique position,” said Mario Ortelli, an analyst at Sanford C. Bernstein.
“They know that when they acquire these brands they can accelerate their development,” Ortelli added.
As part of LVMH, Rimowa will find it easier to get top locations in shopping malls and benefit from discounted advertising, Ortelli said.
For LVMH, the acquisition is its first of a German company and will add annual revenue of about 400 million euros.
LVMH shares rose 0.8 percent to 153.25 euros in early Paris trading.
Rimowa is known for making the first aluminum suitcase, which has a recognizable design of parallel grooves. Its more recent products include a suitcase with an electronic tag in it that can communicate to the owner’s mobile phone via Bluetooth.
Morszeck is to keep a stake in the company and serve as co-CEO of Rimowa.
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