By CultureBanx Team
- LVMH bought a 60% stake in Virgil Abloh’s Off-White band
- The company reported $33.8 billion in revenue for the first half of 2021, a 56% increase compared to a year prior
Louis Vuitton Möet Hennessy (LVMUY +0.03%) bought a 60% stake in Off-White, as it doubled down on the Pied Piper of fashion, Virgil Abloh’s fashion reign. This investment boosts LVMH deeper into the sportswear markets with ties to its unrivaled roster of brands. Abloh is one of the rare Black designers with a leading role at the top of the fashion pyramid as head of menswear for Louis Vuitton. Will this new tie up with Off-White and LVMH help craft larger conversations about representation while giving them a bigger stake in the luxury sportswear and streetwear markets?
Why This Matters: Off-White, created by Louis Vuitton men’s artistic director Abloh, has a line of extremely popular sneakers with Nike (NKE +1.61%). Also, Abloh designed the uniform tennis icon Serena Williams wore while playing in the 2018 U.S. Open. According to a recent study by Bain & Company, Abloh’s appointment to help Louis Vuitton’s menswear group is a reflection of the increasing consumer-driven intermingling of the luxury and streetwear sectors.
This is a crossover sector that LVMH wants a bigger stake in, even as it surpassed Nestlé earlier this year to become the largest company in Europe with a market cap of $382 billion. Many other LVMH brands have high-profile sports tie-ins. Dior released its own Air Jordan sneaker, Hennessy partners with the NBA, and TAG Heuer sponsors Porsche’s racing team and athletes including Naomi Osaka. Let’s not forget that back in February, it bought 50% of Jay-Z’s Armand de Brignac champagne, a deal worth over $600 million.
Situational Awareness: Currently, the Louis Vuitton brand is the biggest revenue driver at the French luxury goods group LVMH. In 2020, the company’s fashion and leather goods business, home to Louis Vuitton handbags, performed better than analysts expected in the fourth quarter, with sales rising 18% year-on-year, and the luxury conglomerate reported $33.8 billion in revenue for the first half of 2021, a 56% increase compared to a year prior. Menswear is currently sold in only 150 of the 450 Louis Vuitton stores around the world, though the company plans to increase that by between 25 and 28 stores this year.
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