BRANDS OF A FEATHERGlobal Consolidation in the Luxury Industry

Libby Scattergood | Prof. Charles Skuba | MARK-229 Marketing Across Borders | 14 November 2016

TABLE OF CONTENTS1. Company overviews--who has successfully consolidated?

a. LVMH

b. Richemont

c. Kering

2. Market Trends

3. Why the tendency toward M&As - from the perspective of the firm.

4. Whos: benefits/detriments of consolidation/diversification--to the consumer.

a. Related: what the 2016 luxury consumer looks like

5. Technology as an indispensable method of engagement with the consumer

a. E.g. Hermès and Chanel have made no attempt to merge with other companies and yet they’re #thriving.

Who’s Who in Luxury Consolidation“Louis Vuitton is a

French fashion house founded in Paris in 1854, part of the

luxury group LVMH.”

“Influential, innovative, and progressive, Gucci is

reinventing a wholly modern approach to

fashion.”

“Cartier is a French luxury goods company that has developed a whole range of luxury collections of high-end

jewelry, watches, leather goods,

fragrances, and accessories.”

INDUSTRY TRENDS:

1. Currency fluctuations

2. Slowed growth in key markets (like China)

3. Weak tourist flows

4. Low oil prices

5. Changing consumer preferences

Why Consolidate:1.Control the value chain.

2.Seize the digital day.

3.Luxury is lucrative.

Kering EyewareOutsourced manufacturing

Gradual rollout - focuses on directly-operated Kering brands’ stores

Capitalization on the Group’s current top-five ranking in a lucrative and fast-growing industry

NET-A-PORTER: marrying e-commerce with ethereal

There’s a reason why private investors like luxury!

Engagement with the consumer made easier w/ digital presence & interactive experiences

“Today’s consumers are increasingly sophisticated and demanding. They want to experience shopping through multiple channels.”

- Deloitte, Global Powers of Luxury Goods 2016.

Thank you!Any questions?