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The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Deals of the Decade

BoF identifies the 10 most transformative partnerships of the past 10 years.
Bernard Arnault | Collage by BoF
  • Laure Guilbault

As the 2010s come to a close, BoF reflects on how the past decade transformed the fashion industry — and the culture at large. Explore our insights here.

PARIS, France - The past decade in deals could easily be written as a tale of how one French luxury conglomerate streaked ahead of the competition.

By the time LVMH Louis Vuitton Moët Hennessy paid $5.2 billion for Italian luxury jewellery company Bulgari in 2011, the group's Chairman and Chief Executive Bernard Arnault had already built a bulging portfolio of brands, including Louis Vuitton, Givenchy and Sephora. Over the course of the next nine years, Arnault added a few more to the list: acquiring German luggage company Rimowa; entering into a joint venture with Stella McCartney; launching Fenty with Rihanna; not to forget the $13 billion integration of Christian Dior in 2017. This year, LVMH became the second most valuable company in Europe with a market capitalisation surpassing €200 billion. It seems fitting then, that we close the decade with another LVMH blockbuster transaction: its $16.2 billion acquisition of American jeweller Tiffany & Co. just a month ago.

The wider industry’s reaction to the emergence of a new, younger and more global consumer than ever before has led to a redefinition of what constitutes a luxury brand. In the past ten years, luxury became a global market; prices are set globally, supply chains stretch across the world and what a brand says or does in one market becomes everybody’s business thanks to the immediacy of social media. Some of the biggest deals of the decade also reflect the sector’s dramatic growth as driven by Chinese consumers, who now represent around a third of global luxury sales, according to a Bain study, up from 19 percent in 2010. Rapidly changing customer tastes, the rise of experiential shopping and the disruption of traditional sales channels driven by e-commerce all mean that being "big" is a necessary requirement to compete on a global playing field.


While there were notable transactions before 2010 (like LVMH’s acquisition of duty free empire DFS in 1997 for $2.47 billion), the pace of deal-making has picked up considerably since 2011. Looking towards the next decade, LVMH’s record-breaking sum for Tiffany is likely to unlock a fresh wave of luxury mega-deals — if there’s much left to buy. There’s no doubt its competitors have been put on notice.

Models walking the runway during the Valentino Spring/Summer 2019 show | Source: Getty Images Models walking the runway during the Valentino Spring/Summer 2019 show | Source: Getty Images

Models walking the runway during the Valentino Spring/Summer 2019 show | Source: Getty Images

1. Mayhoola buys Valentino (2012)
Mayhoola for Investments, a fund backed by the Qatari royal family, bought the Italian fashion house from private equity firm Permira for around $850 million. The brand, established in 1960 by designer Valentino Garavani, has thrived under its discreet owners, who over the last few years have acquired a stable of luxury brands, including Balmain and menswear label Pal Zileri.

In 2018, rumours circulated that Mayhoola might sell Valentino, with Kering touted as a potential suitor (all parties declined to comment at the time). Valentino would command a significant price, but a deal would likely be contingent on Creative Director Pierpaolo Piccioli's commitment to remaining with the brand for multiple years. His runway collections are a favourite of critics.

2. Yoox merges with Net-a-Porter (2015) and Richemont buys the combined company (2018)
In September 2015, six months after the merger between London-based fashion e-commerce business Net-a-Porter and Italy-based discount fashion e-tailer Yoox, the former's founder, Natalie Massenet, suddenly left the company. Compagnie Financière Richemont, the Swiss luxury conglomerate that invested in — and subsequently acquired — Net-a-Porter, had agreed to the merger in which Yoox was to buy its competitor based on a valuation of about £950 million (about $1.4 billion). That was significantly less than what Massenet and others believed it to be worth.

A month later, Yoox Net-a-Porter (YNAP) was officially listed on the Borsa Italiana, becoming the largest fashion e-commerce retailer in the world with a combined market value of more than €3.7 billion, annual revenues exceeding €1.3 billion and control of more than 10 percent of the global online luxury and fashion market.

But today, YNAP faces competition from rivals like Farfetch and MatchesFashion, fast-growing resale sites like Vestiaire Collective and The RealReal, as well as improved e-commerce operations from luxury brands themselves. This year also saw a string of senior departures at the company.

In May 2019, Richemont announced its financial results for the previous fiscal year, exposing YNAP's troubles. The unit which includes the e-commerce platform reported double-digit growth for the year ending March 2019, but also a €264 million operating loss, including a €165 million write-down of the value of its YNAP acquisition. BoF revealed some of the underlying causes of these losses, reporting on evidence that suggested YNAP's tech upgrade, which was meant to help future-proof the company, had the opposite effect. YNAP is set to miss its target of €4 billion in sales by 2020, dragging on Richemont at a time when its rivals are expanding.


3. Apax buys majority stake in MatchesFashion (2017)
New York-based private equity firm Apax Partners acquired a majority stake in in a September 2017 deal that valued the company at a reported $1 billion. The deal followed a fierce bidding war for the the UK-based multi-brand e-retailer, which was said to have also attracted interest from Bain Capital, KKR and Permira.

Husband-and-wife founders Tom and Ruth Chapman started the company with a single boutique in Wimbledon in 1987, expanding rapidly after the pair took their unique merchandising eye online in 2007. The valuation set high hopes for the fast-growing luxury e-commerce market sector but today, the business is facing challenges. In November 2019, the multi-brand online retailer reported sales for the year ending January 31 rose 27 percent to £372 million. But the pace of growth was slower than the 44 percent recorded the previous year, and operating profits plunged by 89 percent to £2.4 million. Chief Executive Ulric Jerome also abruptly left the company in August.

Supreme x Louis Vuitton | Credit: Courtesy Supreme x Louis Vuitton | Credit: Courtesy

Supreme x Louis Vuitton | Credit: Courtesy

4. Carlyle buys stake in Supreme (2017)
The Carlyle Group's investment in Supreme — the first time a top-tier private equity firm invested in streetwear — helped to underscore the power of the skate-inspired brand founded by James Jebbia in downtown New York in 1994.Sources close to the company confirmed that Carlyle paid around $500 million for a roughly 50 percent stake in Supreme in a deal that valued the business at over $1 billion. How much the skate brand that has turned its carefully curated street 'cred' into a valuable commodity can continue to scale remains to be seen however, especially as scarcity of product is a key element of its global success. Carlyle, which doesn't tend to hold on to businesses longterm, will want to significantly boost sales before ultimately seeking an exit.

5. Coach buys Kate Spade (2017)
Coach acquired the accessories label in 2017 in a deal worth $2.4 billion, as part of a wider plan to create an American luxury conglomerate along the lines of Kering or LVMH (the brand had purchased Stuart Weitzman two years earlier) under the new name Tapestry Inc. The idea was that by combining forces, Coach, Kate Spade and Stuart Weitzman could fight declining mall traffic and growing online competition.

But in September 2019, weeks after the company cut its full-year earnings forecast, Tapestry ousted Chief Executive Victor Luis following a lack of success with his acquisitions. According to a BoF report, the primary problem was Kate Spade, whose colourful bags were cult hits with a generation of young American women before losing their cachet. Tapestry has been trying to turn the label around, but new product offerings under Creative Director Nicola Glass (hired in late 2017) have yet to gain traction. It's a brand that lacks the storytelling power and cultural significance of Europe's established luxury players, and doesn't have direct ties to the designer whose name is on the door. Tapestry Chairman Jide Zeitlin — who stepped in as interim chief executive after Luis' departure — is leading the search for a permanent replacement. It's a tough assignment: to rival Europe's luxury giant, a long-term mindset rooted in patient brand building will need to be adopted.

6. Michael Kors Holdings buys Versace, Forms Capri Holdings (2018)
Also in the race to build America's first-ever luxury conglomerate is Michael Kors Holdings, now renamed Capri Holdings. In September 2018, it acquired world-famous Italian fashion house Versace for $2.1 billion in a move that was to help the accessible luxury juggernaut take a bigger slice of the high-end luxury market. (In 2011, Michael Kors Holdings's initial public offering of common stock had valued the company at as much as $3.63 billion.

Jennifer Lopez walks the runway at the Versace Spring/Summer 2020 show | Photo Getty Images Jennifer Lopez walks the runway at the Versace Spring/Summer 2020 show | Photo Getty Images

Jennifer Lopez walks the runway at the Versace Spring/Summer 2020 show | Photo Getty Images


It marked the first major IPO of an American designer in years). Some observed that the price tag was far too high for a company that has struggled to grow sales and frequently run at a loss, despite its famous history. The Versace is globally respected and admired, but the power of the Versace brand is much greater than the scale of the business.

Earlier this year, Capri Chief Executive John Idol told BoF he expected the Italian house will more-than double its sales to $2 billion in the coming years, thanks to the combination of global name recognition and a bigger investment. The plan is to bump store numbers to 300, and to expand its handbag and womenswear offerings, which drive sales. Comparable third-quarter sales for Versace were flat compared with a year earlier, but if it can continue to ride the nostalgia wave that Donatella Versace has so deftly captured in her runway collections and deliver in those popular categories, doubling sales is not out of the question.

7. Farfetch IPO (2018)
Farfetch, one of the biggest players in online luxury retail, sold itself to investors as a technology company, with the promise of turning its mastery of customer data and a sophisticated online platform into profits, without the stores, warehouses and other physical assets that weigh down retail margins.

Unlike department stores like Saks or Barneys New York — or online rivals like Net-a-Porter and MatchesFashion — Farfetch doesn’t take on the risk of buying and holding inventory, instead allowing brands and retailers to sell directly through its marketplace, taking an average commission of 30 percent on each sale.

Farfetch, one of the biggest fashion IPOs in years | Credit:Shutterstock Farfetch, one of the biggest fashion IPOs in years | Credit:Shutterstock

Farfetch, one of the biggest fashion IPOs in years | Credit:Shutterstock

For sellers, it means gaining access to Farfetch's growing global customer base. The result was one of the biggest fashion IPOs in years, valuing the business at $5.8 billion and putting fashion squarely on the radar of Silicon Valley. But now Farfetch is facing the same challenges as some of its tech counterparts such as Uber: searching for profitability.

In August, Farfetch bought New Guards Group, which operates streetwear sensation Off-White. But it has struggled to explain how this fits into its larger strategy of becoming luxury’s Amazon-like “everything store.” To date, investors haven’t taken well to the company’s evolving business model, hyperactive M&A or disappointing profit performance.

8. Fosun takes majority stake in Lanvin (2018)
Lanvin was saved from collapse by a Chinese juggernaut after 17 years of ownership under Taiwan-based media magnate Shaw-Lan Wang. The brand had peaked in 2012, when it generated revenues of €235 million under long-time designer Alber Elbaz, only to plummet four years later when the company posted its first loss in more than a decade. Changing creative directors over the next two years failed to calm the storm.

The transaction marked the Chinese conglomerate's most prominent fashion investment to date. Over the past half-decade, Chinese investor appetite for European heritage brands has grown, with firms like Icicle Fashion Group snapping up bankrupt label Carven. But as BoF reported earlier this year, not every deal has been fruitful, and there's still plenty to be done at Lanvin.

9. Authentic Brands Group buys Barneys (2019)
After a contentious three-month auction process, licensing firm ABG acquired the bankrupt luxury department store for $271.4 million. The deal will see most of the retailer's remaining stores close and its brand name licensed to rival Saks Fifth Avenue in North America.

Barneys was pushed to file for Chapter 11 bankruptcy in August after a 72 percent rent hike at its nine-story Madison Avenue store to $27.9 million annually, which went into effect in January. This was the result of an arbitration ruling after the store and its landlord, Ben Ashkenazy, failed to agree to the terms of a new lease.

Backed by private equity firm BlackRock, ABG has built a lucrative business out of licensing its intellectual property to vendors and manufacturers of myriad products, from shoes to CBD cream. Without ever holding inventory, ABG’s profits come from the royalty fees from its partners. As part of its plan to monetise Barneys’ intellectual property, ABG is looking to pop-ups, shop-in-shops, and e-commerce. It will also change Barneys' Madison Avenue location into a pop-up retail experience which will include art installations, boutiques and entertainment.

10. LVMH buys Tiffany (2019)
LVMH's $16.2 billion acquisition of the storied American jeweller was the largest ever in the luxury sector, putting Tiffany in the hands of the world's largest luxury goods group owned by Europe's richest man. The conglomerate's last major investment in hard luxury was its $5.2 billion deal for Bulgari in 2011, which doubled the size of its watches and jewellery business.

LVMH Chief Financial Officer Jean-Jacques Guiony described the Tiffany deal as a "game-changer" for its watches and jewellery segment, batting away concerns over Tiffany's near-term performance. The American jeweller is facing weak demand at home and abroad, and will likely need heavy investment to re-energise its brand and business. The deal will bring LVMH's substantial financial and market clout to help support Tiffany's ongoing transformation efforts. It has struggled with modernising its retail network, with poor merchandising and an uneven in-store experience undermining strong brand equity. At the same time, it boosts the French company's presence in the US market. The deal will also spell bad news for rival Richemont, which owns Cartier and Van Cleef & Arpels and is currently the dominant player in the hard-luxury space. Jewellery was one of the best performing luxury categories in 2018, according to Bain & Co., which predicts that the global $20 billion market will grow 7 percent this year.

Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholder’s documentation guaranteeing BoF’s complete editorial independence.


Related Articles:

The Secret Deal to Merge Net-a-Porter with YooxOpens in new window ]

Farfetch Surpasses $8 Billion Valuation in Early TradingOpens in new window ]

How Supreme Grew a $1 Billion Business with a Secret PartnerOpens in new window ]

What Pushed Barneys to the Edge?Opens in new window ]

LVMH Buys Tiffany in $16 Billion DealOpens in new window ]

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