LVMH Moet Hennessy Louis Vuitton, the world's top luxury retailer, has been on an acquisition spree across Asia since 2009, armed with a private equity arm L Capital Asia. The latter started with a war chest of US$650 million and this year, it was bumped up to US$1 billion.
These are the Singapore businesses it has snapped up in the past five years.
1. Crystal Jade Group
The F&B group, a familiar brand in Singapore, seems an unlikely target for the luxury retail group more often associated with high fashion and premium wines and alcohol. But it was announced this week that LVMH had inked a deal to buy, for an undisclosed sum but which industry sources estimated to be worth about US$100 million, "over 90 per cent" of Crystal Jade.
Crystal Jade has been on a regional and international expansion spree, and plans to open 18 outlets this year, as well as a 20,000-sq ft restaurant in San Francisco which can seat more than 400. Given LVMH's track record with other Singapore businesses it has acquired, it is likely to boost the company's expansion plans.
2. Ku De Ta
LVMH bought a 51 per cent stake in the nightclub's holding company in January, with plans to take the brand global in the coming years. Industry estimates pegged the deal as worth more than $100 million.
L Capital Asia’s managing partner Ravi Thakra told The Straits Times that it is opening a Ku De Ta outlet in Hong Kong's party district Lan Kwai Fong in the second half of this year and has already secured sites in Thailand and France. There are aggressive expansion plans in the works as he plans to grow the company from its current $50 million revenue to $200 million in four years.
3. Charles & Keith
The homegrown shoe retailer sold a 20 per cent stake to LVMH for more than $30 million after a hot pursuit which saw the company being wooed by other private equity funds and high net-worth investors. The deal valued the company at almost $200 million.
At the time of the deal, the company said it was looking to tap into LVMH's vast experience so as to expand more easily. And it looks as if the deal has paid off. LVMH has helped the company expand into the vast Chinese market where it now runs about 70 outlets with plans to add 30 to 50 stores a year for the next few years.
3. Heng Long Tannery
Founded in 1947, this homegrown business has been providing exotic crocodile skins to high fashion houses for decades. The low-key tannery shot into the limelight in 2011 when LVMH bought a 51 per cent share of the listed company, valuing it at $160.8 million.
Managing director Koh Chon Tong told Life! in an interview that having LVMH as a fairy godmother is good for business as he can get advance contracts from crocodile farmers and can afford to stock deeply.
4. Sincere Watch & Jewellery
LVMH was part of a consortium that paid $112.7 million this luxury watch and jewellery retailer in 2009, giving LVMH a 26.3 per cent interest in the company. Although Sincere was the second biggest watch retailer in Singapore, it had suffered a rocky couple of years before the LVMH deal. It was sold to Hong Kong-based watch company Peace Mark with the aim of breaking into the China market. Peace Mark went belly-up, and Sincere was eventually bought by a group led by its chairman and managing director Tay Liam Wee and LVMH.