2023 will also be a year of buying and selling for luxury giants: buying down core commercial real estate, acquiring key suppliers, and competing for hot brands.
These are just another continuation of the luxury brand wars. The "Matthew effect" of the strong is particularly prominent in the luxury industry.
Prada paid $425 million in cash to buy a 12-story building on New York's Fifth Avenue, opposite Trump Tower, one of the most famous projects in the world's retail real estate, where Prada's Fifth Avenue flagship store has been located since 1994.
The battle between Kering and LVMH began in Paris.
Kering spent 1.3 billion euros on two key properties in Paris, 235 Rue du Faubourg Saint-Honore, next to Louis Vuitton's store on Place de Fontaine, to house a new GUCCI store, It is also adjacent to the company's luggage store Gucci Valigeria (229 Rue du Faubourg Saint-Honore); The first is the former Canadian embassy at 35-37 Avenue Montaigne, which will be used as a large-scale flagship store for Saint Laurent, the 8,300 square meter store is located just opposite Dior's headquarters at 30 Avenue Montaigne.
The Louis Vuitton building at 101 Champs-Elysees
The shopaholic LVMH Group bought six properties in Paris alone in the two years from 2022 to 2023. This includes two large buildings on the Champs-Elysees this year, 150 and 101, which cost 1 billion euros and 900 million euros respectively. The latter is where Louis Vuitton's Champs-Elysees flagship store is located, while the former is said to be because Kering Group originally intended to lease it for GUCCI, prompting LVMH Group to move first.
Four other prime Parisian properties include 7 Rue de Peace, where Piaget is located near Place de Fontaine, the heart of the luxury jewellery industry; 22 Avenue Montaigne, where Louis Vuitton is located; 19 Francois 1er, opposite CELINE's shop on Avenue Montaigne; And 12 place des Etats-Unis, home to Maison Margiela's studio, for a total of 1.05 billion euros.
As a scarce resource, these commercial properties with growth potential are of high strategic value to brands.
On December 7, CHANEL 2023/24 Premium Workshop collection was launched in Manchester, the third largest city in the UK
Another scarce resource is suppliers. Controlling the supply chain is becoming increasingly important for luxury brands, which signals the ability of brands to scale up reproduction.
CHANEL and LVMH Group's supply chain battle started in Italy. As a French brand, CHANEL has bought a series of Italian workshops over the past few years to replenish its Metiers d'Art camp, which boasts half of Italian blood. These acquisitions continue around fabrics in 2023. LVMH declared that "Italy is a second home" and beefed up its supply chain with acquisitions of hardware, leather and eyewear makers for its craft division, LVMH Metiers d'Art. The two brands are also joining forces in an unprecedented way to help suppliers reduce their environmental impact and form a new camp in sustainability.
On March 11, the Capri Group's brand VERSACE held the Fall/Winter 2023 collection runway show in Los Angeles.
2023 is also a year of brand integration.
One of the most significant deals was a photo op between two American luxury groups. In August, Tapestry, the American fashion conglomerate that owns Kate Spade, Coach and Stuart Weitzman, announced a deal to buy Capri Holdings, the parent company of Michael Kors, Versace and Jimmy Choo, for $8.5 billion. It is the biggest acquisition of a luxury fashion group in recent years. The merger of the two light luxury groups is a prelude to the arrival of American luxury groups and a head-on competition with French giants such as Kering and LVMH.
L 'Oreal also made its largest-ever acquisition, buying Brazilian beauty giant Natura&Co for $2.58 billion. Its Australian skincare brand, Aesop, has expanded its range of high-end products.
Kering is expanding its reach by acquiring French high-end fragrance brand Creed (for 3.5 billion euros) to strengthen its competitiveness in the beauty industry, which is also the first big move since Kering appointed former Estee Lauder executive Raffaella Cornaggia as the CEO of Kering Beauty.
The group's most remarkable acquisition in 2023 was the purchase of a 30% stake in the top Italian fashion house Valentino from Mayhoola, the investment arm of the Qatari royal family, for 1.7 billion euros. The move further completes the Group's presence in the fashion sector.
Richemont also expanded its luxury brand matrix beyond jewelry and watches by acquiring a 70 percent stake in Italian luxury footwear brand Gianvito Rossi for $1.87 billion.
Saint Laurent's first jewellery collection
Each group has its tentacles in a wider area.
Prada is also ramping up its beauty business, with the recent launch of skincare and cosmetics following last year's perfume line. Byredo, a fragrance brand owned by Spanish beauty giant Puig Group, launched 18-karat gold and sterling silver jewelry in November. The Kering Group's fashion brand Saint Laurent has also officially entered the jewelry market, starting to sell a collection of fine jewelry in select flagship stores around the world. Balenciaga, the same group, is partnering with New York's emerging independent watch brand Jacob&Co. Collaborated on the jewellery line Diamant.
