LVMH confirms sale of Marc Jacobs, acquisition price reaches US$1 billion

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The end of nearly 30 great years with LVMH

Looking back to 1997, LVMH acquired a large majority stake in Marc Jacobs’ namesake brand after he was appointed Louis Vuitton’s first creative director. With the group’s extensive resources behind it, the niche brand, which had focused on New York street style, quickly grew into an internationally renowned fashion house. Following news of the sale, LVMH chairman Bernard Arnault also shared heartfelt remarks in a statement, thanking Jacobs for his enormous contributions to the group over the past 30 years and highly praising his undeniable influence on the fashion world.

Two major groups join forces to acquire Marc Jacobs

The high-profile buyers behind the deal are WHP Global, a New York brand management company that owns Vera Wang, and G-III Apparel Group, Donna Karan’s parent company. The two will form a joint venture, with each holding a 50% stake, and jointly retain the brand’s intellectual property. G-III alone is contributing as much as US$ 500 million in cash (about HK$ 3.9 billion / NT$ 16 billion), bringing the deal’s valuation to US$ 1 billion (about HK$ 7.8 billion / NT$ 32 billion). The striking figure is enough to show the brand’s enduring investment value in contemporary fashion.

What’s next for Marc Jacobs?

 

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What many readers who love the brand are most concerned about is whether the designer himself will stay. The good news is that Marc Jacobs has personally reassured everyone, confirming that he will remain the brand’s founder and creative director. In a post on his personal social media, he said that after meeting with the new group’s management, he deeply felt that their love for and respect for the brand were 100% genuine. Though he is officially saying goodbye to his longtime corporate home, he promised to continue leading his passionate design team and ensure that the fashion shows and avant-garde aesthetic everyone loves will continue unchanged.

There had actually been signs that this sale was coming. The global luxury market is currently in a relatively slow period, and many major groups are reassessing their brand portfolios. Because the brand is priced in the relatively accessible affordable-luxury segment, it is more directly affected by declining consumer spending than luxury brands aimed at the very top of the market, such as Loro Piana. LVMH has gradually sold off brands including Donna Karan and Off-White in recent years, and this decision to let Marc Jacobs go is clearly a business move to concentrate the group’s resources on its core profit-generating brands.

It’s hard to believe that this classic partnership, which has been with us for so many years, is coming to an end now.

Seen from another perspective, though, this is certainly an exciting new beginning, making us even more eager to see what surprising sparks the brand will create under the leadership of its new owners.

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