The LVMH–Bulgari agreement: Changes in the luxury market that lead family companies to sell up

Jean-Noël Kapferer and Olivier Tabatoni

Journal of Brand Strategy, 2012, vol. 1, issue 4, 389-402

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 (search for similar items in EconPapers)
JEL-codes: M3 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jbs000:y:2012:v:1:i:4:p:389-402

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