LVMH has agreed to buy the Belmond luxury hotel chain, marking a big expansion of a previously niche hotels business for the Louis Vuitton parent. Julian Satterthwaite and Lisa Jucca reports.
LVMH is best known for this kind of thing: expensive Louis Vuitton handbags.
Now it wants to sell you a place to park your bag, too.
The luxury brand has struck a deal to buy high-end hotel chain Belmond.
It’s known for upscale hideaways like this: the Cipriani hotel in Venice, a favorite of the stars and site of George Clooney’s wedding reception.
The purchase has a $3.2 billion price tag.
It marks a big expansion into hotels for LVMH.
Reuters Breakingviews columnist Lisa Jucca in Milan says the company wants to sell experiences, as well as goods:
REUTERS BREAKINGVIEWS COLUMNIST LISA JUCCA,
“So this purchase fits with that project, that vision. And they are not completely novices to the hospitality industry because if you remember in 2011 LVMH bought Bulgari, who are know for its jewels, but also owner of its own hotel chain, the Bulgari hotels.”
The deal gives LVMH a porfolio of top properties.
Among them, the only hotel within Macchu Pichu in Peru.
But it’s paying a forty percent premium to Belmond’s closing share price from Thursday (December 14).
Some analysts say that looks a little expensive.
LVMH will have to prove it knows how to sell expensive getaways, as well as posh bags.