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The LVMH–Bulgari agreement: Changes in the luxury market that lead family companies to sell up

Author

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  • Kapferer, Jean-Noël
  • Tabatoni, Olivier

Abstract

On 7 March, 2011, the world-leading luxury group LVMH acquired a majority stake in Bulgari, a famous Italian jewellery house. The deal reflects a major revolution that is occurring within the whole luxury sector: the transformation of manufacturers of rare products into creators of exceptional branded retail experiences Furthermore, as luxury companies expand their businesses into Brazil, Russia, India, and China (the BRIC countries), particularly China, the demands of these huge new markets put great financial and managerial pressures on family-owned companies. The purpose of this paper is to analyse the LVMH–Bulgari deal from interrelated marketing and financial–strategic perspectives, and to show why companies that once insisted they would remain family-owned have had to abandon this policy and join luxury groups instead.

Suggested Citation

  • Kapferer, Jean-Noël & Tabatoni, Olivier, 2012. "The LVMH–Bulgari agreement: Changes in the luxury market that lead family companies to sell up," Journal of Brand Strategy, Henry Stewart Publications, vol. 1(4), pages 389-402, December.
    • Handle: RePEc:aza:jbs000:y:2012:v:1:i:4:p:389-402
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    More about this item

    Keywords

    luxury; mergers and acquisitions; brand dilution; family companies; China; retail experience;
    All these keywords.

    JEL classification:

    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising

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