LVMH's Hotel Saint-Barth Isle de France
LVMH Moët Hennessy Louis Vuitton’s acquisition of Hotel Saint-Barth Isle de France will bolster the luxury conglomerate’s presence in the travel and hospitality sphere.
The conglomerate plans to transfer products and services from its other companies such as wines and spirits that may enhance the property’s allure. Continually growing in multiple luxury sectors likely enables the company to gather pioneering strategies and refine existing ones by testing them in different arenas.
“This is an interesting diversification strategy given the increasing desire of affluent consumers to indulge in luxury experiences,” said Meera Raja, director of The Luxury Institute, New York.
“It also serves as a potential opportunity for LVMH to present clients their diverse portfolio of brands in one setting,” she said.
“The acquisition reflects a shift in the luxury industry: brands exploring non-traditional approaches to boost customer awareness and target new audiences.”
Ms. Raja is not affiliated with LVMH, but agreed to comment as an industry expert.
LVMH declined to comment directly.
Infinite view
AJ Capital Partners had acquired the Hotel Saint-Barth Isle de France in 2010.
Hotel Saint-Barth Isle de France is located on the island of St. Barthélemy in the French West Indies and has 39 rooms, suites and villas.
Hotel Saint-Barth Isle de France
Also included in the property is the Isle de France Spa and the resort’s signature restaurant, Las Case d’Isle.
Since luxury hotels strive to provide a holistic experience, the new property seems to be a natural place for LVMH to implement resources from other companies.
LVMH’s Hotel Management division will operate the property. The team aims to respond to a growing demand for innovation in the luxury hospitality sector by offering the company’s wines, spirits and cosmetics.
Hotel Saint-Barth Isle de France
The company’s current hospitality portfolio includes Cheval Blanc in Courchevel, Maisons Cheval Blanc currently under development in the Maldives, the Sultanate of Oman and Paris at La Samaritaine, as well as White 1921 in Saint-Tropez.
“While the base of LVMH’s holdings fall under the luxury products category, acquisitions within the travel and hospitality sector offer an avenue for growth within the luxury industry without sacrificing its core business,” said Taylor Rains, account coordinator at Rawle Murdy Associates, Charleston, SC.
“Luxury brands that fall cleanly into vertical categories are few and far between,” he said.
“Most are, in one form or another, luxury lifestyle brands.”
Glib market
LVMH has gained greater latitude in other luxury industries so far this year.
For example, LVMH Moët Hennessy Louis Vuitton’s $2.6 billion deal for 80 percent control of Italian cashmere giant Loro Piana will give the French luxury conglomerate an iron lock on the entire supply chain.
The Paris-based company’s sustained march toward luxury supremacy may not darken the overall manufacturing landscape, although its appetite for family-owned brands and sources of raw material is undiminished. With this deal, coming two years after its purchase of Italian jeweler Bulgari, LVMH gains a growing brand to fortify its global aspirations, while Loro Piana may benefit from LVMH’s business expertise as an ongoing family-steered operation (see story).
Furthermore, LVMH is riding on buoyant news as it recorded revenue of $18.3 billion in the first half 2013, an increase of 6%.
The company may be spurred to carry on its expansionary habits after seeing its revenue rise.
“While I doubt the company’s growth will end anytime soon, I would not be surprised if it evolved,” Mr. Rains said.
“Recent LVMH acquisitions have garnered less-than-stellar publicity, particularly compared to years passed when the general public was largely unaware these transactions were taking place,” he said.
“It would stand to reason that the corporation would shift toward less visible acquisitions in coming years, perhaps further developing secondary arms of the business like LVMH Hotel Management.”
Final Take
Joe McCarthy, editorial assistant on Luxury Daily, New York