LVMH announced on Wednesday that it was abandoning the $14.5 bn takeover plan.
By AP |
Reuters
The deal's value had been eroded by wider industry troubles caused by the coronavirus pandemic.
PARIS: It's an ugly spat for such a glamorous industry: French luxury powerhouse LVMH and U.S. jeweller Tiffany & Co. are blaming each other for the collapse of what would have been the sector's biggest-ever buyout deal.
Paris-based LVMH had announced Wednesday it was abandoning the $14.5 billion takeover plan because the French government had requested a delay to assess the impact of proposed U.S. tariffs. Tiffany sued to enforce the deal, and on Thursday LVMH lashed back.
The Paris-based conglomerate - whose holdings including Christian Dior, Louis Vuitton, Moet & Chandon, Bulgari and Sephora - issued a statement threatening legal action of its own, accusing Tiffany of mismanaging the financial crisis prompted by virus lockdowns.
LVMH criticised Tiffany for issuing dividends even as it was losing money, and Tiffany's performance in the first half of this year was "significantly" worse than that of other LVMH brands during the period. "LVMH confirms that the conditions are not met" to close the deal, it said.
Even before Wednesday's announcement, the deal's value had been eroded by wider industry troubles caused by the coronavirus pandemic, which has caused retail sales to plunge around the world.
Tiffany, based in New York, said LVMH's argument for halting the buyout has no basis in French law, and that LVMH hadn't attempted to seek the required antitrust approval from three jurisdictions. LVMH disputed that, and said the necessary approvals were expected in October.
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Tiffany, known for its delicate jewellery, distinctive blue boxes and an Audrey Hepburn movie, had been trying to transform its brand to appeal to younger and more digital shoppers. LVMH, had thought the deal would strengthen its position in high-end jewellery and in the U.S. market.
The pandemic threw all those assumptions and plans in doubt, and the threat of new tariffs between the U.S. and Europe was cited as a further complicating issue.
Tiffany’s Blue Now Belongs To LVMH; Ambani, PeeCee, Gaga's Connections To The Iconic Brand
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French luxury giant LVMH, on Monday, acquired iconic American jeweller Tiffany for $16.2 billion. The acquisition, which took just over a month and three revised bids to get done, is the biggest-ever deal for the French group owned by Bernard Arnault.
According to a report in news agency Reuters, Tiffany was codenamed "Tea" and LVMH was "Latte" during the talks that led to the takeover.
Reuters also reported that LVMH's 70-year-old billionaire boss was himself 'focused on ensuring he was getting control of Tiffany's most valuable assets: all the patented elements that came with the Tiffany brand, notably its robin's egg blue boxes'.
The third-richest man in the world, Arnault, emphasised on the importance of the blue in an interview with the news agency, saying, "We're the owner of a colour. It's a pretty rare thing."
LVMH had forayed into high-end jewellery in 2011, when it acquired Italian jeweller Bulgari.
French luxury giant LVMH, on Monday, acquired iconic American jeweller Tiffany for $16.2 billion. The acquisition, which took just over a month and three revised bids to get done, is the biggest-ever..
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Earlier this year, the iconic jeweller was making national headlines due to reports of it coming to India in partnership with India's richest man, Mukesh Ambani.
According to news reports, Ambani-led Reliance Brands has plans to bring the iconic blue box to Delhi and Mumbai by mid-2020.
'Quantico' star Priyanka Chopra also has a personal connect with the brand. Not only did the star host her bridal shower at the the Blue Box cafe, situated inside the brand's flagship store, but her singer-hubby Nick Jonas also shut down the Fifth Avenue outpost to pick the perfect 4-carat ring for her.
Earlier this year, the iconic jeweller was making national headlines due to reports of it coming to India in partnership with India's richest man, Mukesh Ambani.
According to news reports, Amban..
Read More
Tiffany's storied history dates back to 1837, when the first store opened on Broadway in New York. Founded by Charles Lewis Tiffany, the iconic brand initially sold stationary, handkerchiefs and other finery.
On opening, it became the first company to clearly mark prices on its products, leaving no option of bargaining. It also started a new norm by only accepting payments in cash.
Over the next decade, the company shifted to jewellery. In 1848, it started acquiring exotic European collections and crown jewels, including diamonds worn by Marie-Antoinette.
Almost unstoppable, two years later, Tiffany had opened a store at rue de Richelieu in Paris. This expansion continued, with a London store in 1868, and eventually a watch factory in Geneva, a few years later.
The legendary brand saw a new direction with Charles's painter-son, Louis Comfort Tiffany, becoming the company's first official design officer. At the end of the 19th century, stained glassworks and lamps by Tiffany Jr. became synonymous with the 'Gilded Age' in America, with some of them even being installed at the White House. They were later removed early in the 20th century.
(Image: AP)
Tiffany's storied history dates back to 1837, when the first store opened on Broadway in New York. Founded by Charles Lewis Tiffany, the iconic brand initially sold stationary, handkerchiefs and othe..
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The rise of Tiffany parallels that of New York. The American jeweller set up its flagship store on Fifth Avenue in 1940, creating a landmark that attracts tourists even today. This store now accounts for almost 10 per cent of the brand's overall sales.
Over time, the aspirational value of the brand increased with the emergence of America’s high society as its customers. From the Kennedys and Richard Nixon to Elizabeth Taylor and Richard Burton, the brand became synonymous with classy indulgence.
In 1862, President Abraham Lincoln purchased a Tiffany seed pearl necklace and earrings for his wife for the inaugural ball.
(Image: AFP)
The rise of Tiffany parallels that of New York. The American jeweller set up its flagship store on Fifth Avenue in 1940, creating a landmark that attracts tourists even today. This store now accounts..
Read More
The brand's flagship store also houses the famous Tiffany yellow diamond, that Charles bought in 1878 for $18,000. The 287.42-carat diamond, said to be one of the world’s finest gemstones, was cut into a cushion-shape of 128.54 carats, and named the 'Tiffany Diamond'.
Over 300 guests throng the store each day for a glimpse of the diamond.
The rare stone has only ever been worn three times in history. The most-recent being Lady Gaga, who arrived at the Oscars this year with the diamond around her neck.
The gem was worn for the first time at the 1957 Tiffany Ball in Newport, Rhode Island by Mary Whitehouse. Following her, Audrey Hepburn became the second person to be granted permission to wear the diamond, for promotion of 'Breakfast at Tiffany's'. The actress wore the stone in a Jean Schlumberger necklace.
(Image: Reuters)
The brand's flagship store also houses the famous Tiffany yellow diamond, that Charles bought in 1878 for $18,000. The 287.42-carat diamond, said to be one of the world’s finest gemstones, was cut in..
Read More
In 1961, Tiffany & co made its cinematic debut with another icoc, Audrey Hepburn. 'Breakfast at Tiffany’s', the first movie ever filmed at Tiffany’s flagship store, continues to be a classic till date.
The store went on to feature in other films including 'Sleepless in Seattle' and 'Sweet Home Alabama'.
In 1961, Tiffany & co made its cinematic debut with another icoc, Audrey Hepburn. 'Breakfast at Tiffany’s', the first movie ever filmed at Tiffany’s flagship store, continues to be a classic till dat..
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