LVMH to add Rimowa suitcases in USD716m German foray

LVMH Moet Hennessy Louis Vuitton SE agreed to take over suitcase maker Rimowa for 640 million euros (USD716 million) and will put Alexandre Arnault in charge of the group’s first German asset, a sign that Bernard Arnault is expanding the family’s role in his luxury empire.
The world’s largest luxury-goods maker is buying an 80 percent stake from Dieter Morszeck, grandson of Rimowa’s founder, LVMH said yesterday. Morszeck will run the Cologne-based business alongside 24-year-old Alexandre Arnault, who gets his first big job at his father’s group.
Rimowa’s grooved aluminum suitcases have become a common sight in airport security lines, owned by celebrities including Will.i.am and Gwyneth Paltrow. Selling for as little as $400, the cases are less of a luxury than LVMH’s Louis Vuitton, whose trunks typically cost thousands of dollars. Founded in 1898, Rimowa’s growth has outpaced the broader luggage market’s 5 percent expansion over the past five years, an LVMH spokesman said.
“LVMH is looking for brands that have heritage and a unique position,” said  Mario Ortelli, an analyst at Sanford C. Bernstein. “They know that when they acquire these brands they can accelerate their development.”
As part of LVMH, Rimowa will find it easier to get top locations in shopping malls and benefit from discounted advertising, Ortelli said. For LVMH, the acquisition is its first of a German company and will add annual revenue of about 400 million euros. Rimowa – whose designs are based on the fuselage of the first metallic aircraft – has grown sales at a pace of 20 percent per annum over the past two years, RBC Europe analysts estimate. Bloomberg