Will Clarins Be The Next Target Of LVMH Acquisition?

Although P LVMH group is expensive as the world's largest luxury group, its stock price has only risen 5% this year, far below the main competitor's share price increase: Richemont 27%, Swatch 26%, Hermes and Kering are 18%.

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The slow growth of the core brand < a href= "http://www.91se91.com/news/index_c.asp" > Louis Vuitton < /a > P has prompted LVMH to find new growth points.

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< p > 2011 LVMH bought Italy family jewelry brand Bvlgari by changing shares, valuing 4 billion 200 million euros (including debt), which is 22 times the 2011 EBITDA (interest tax depreciation before profit), and this year's acquisition of Loro Piana 80% stake by 2 billion euros, the valuation is equivalent to 19 times of 2013's EBITDA - all significantly exceed the average level of the luxury goods industry.

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Less than P, the weighted average cost of capital (WACC) of the luxury goods industry is around 10%. According to HSBC, Bvlgari will take at least 10 years to reach the level of capital return.

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< p > because Louis Vuitton has a high proportion of LVMH group and contributes more than half of its operating profit, the growth of the other more than 60 brands in the group can hardly offset the slowdown in the core brand growth: < /p >

< p > < a href= "http://www.91se91.com/news/index_c.asp" > LVMH < /a > does not announce the performance of a single brand, but according to industry estimates, the annual sales volume of Louis Vuitton is as high as 7 billion 300 million euros, and the annual sales of LVMH's two brands Celine, Fendi and Celine are about 500 million euros.

Marc Jacobs plus the sales of brand licensed goods, the turnover is close to US $1 billion, but the growth point will be excluded because LVMH has just announced that it will be listed separately in three years.

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By contrast, the sales of the core brand Gucci of the Kering group is 3 billion 600 million euros, which is only half of that of Louis Vuitton. With the sales of another brand Bottega Veneta rapidly rushing to 1 billion euros, Saint Laurent has also entered the fast lane, approaching 500 million euros, which can more effectively hedge the growth slowdown of P.

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If the LVMH is getting new growth momentum through merger and acquisition, it is difficult to find a suitable scale of mergers and acquisitions in the fields of fashion leather goods, wine, jewelry and clocks and so on. Industry insiders think that if LVMH buy a high-end skin care brand, it will give full play to the channel advantage of Sephora cosmetics chain and DFS duty-free shop to meet the growing demand of the new market led by China for high-end skin care and cosmetics products.

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< p > according to Euromonitor report, China's high-end skin care products market will double in the next 4 years, reaching 6 billion euros in 2017.

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< p > potential acquisitions: French family brand Clarins (CLARINS), Sisley (Sisley), Nuxe and Spanish Natura Biss. < /p >

CFO, less than P LVMH, has said that Sisley and Clarins are both good buyers, but their family owners have no intention to sell them.

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< p > however, insiders believe that "everything is possible".

The luxury brands owned by the family usually claim to be "not for sale", but no one expected the sale of Loro Piana before.

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Courtin-Clarins, the founding family of group P, < http://www.91se91.com/news/index_c.asp > Clarins < /a > Courtin-Clarins reprivatized the company in 2008. The annual sales volume is more than 1 billion 200 million euros. In the past few years, it has said it has no intention of selling. But this year, the merger of its fragrant water brand Azzaro and Thierry Mugler with its core skin care brand business has led to speculation that the move is to improve the profitability of the group and pave the way for the overall sale of a.

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< p > at present, Clarins's business in China is still small, and there will still be plenty of room for growth in the future.

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