LVMH is reportedly exploring the sale of several fashion, beauty and drinks brands as the luxury giant looks to sharpen its focus amid weaker demand across the sector.
According to the Financial Times, the French conglomerate has considered putting assets including Marc Jacobs, its stake in Rihanna’s Fenty Beauty brand and US wine producer Joseph Phelps Vineyards up for sale.
The potential disposals would represent one of the most significant portfolio reviews in LVMH’s history, as the group looks to concentrate investment around its biggest profit drivers, including Louis Vuitton and Dior.
The luxury group, controlled by billionaire Bernard Arnault, owns more than 75 brands across fashion, beauty, wines and spirits, hospitality and media.
LVMH has already offloaded a number of assets over the past 18 months, including luxury streetwear label Off-White, the Greater China arm of travel retailer DFS, and its 49 per cent stake in Stella McCartney.
The latest round of potential sales reportedly forms part of a wider cost management drive, with underperforming businesses under review.
Bernstein analyst Luca Solca told the newspaper: “LVMH is clearly looking at their portfolio to see what is not performing, what is dragging on margins, because they are in a time when the pressures on the business are higher.”
The shift marks a notable change in direction for Arnault, who built LVMH into one of Europe’s most valuable companies through decades of acquisitions. Since 2000, the group has completed more than 200 takeovers, including its $16bn purchase of Tiffany & Co in 2020 and its €3.7bn deal for Italian jeweller Bvlgari in 2011.
However, LVMH is now said to be assessing weaker parts of the business, particularly within its wines and spirits division Moët Hennessy, which has been one of the group’s most challenged areas in recent years.
Brands understood to have been discussed with potential buyers include Eminente rum and Joseph Phelps wineries in California.
Further disposals in LVMH’s travel retail division are also reportedly under consideration.
Beauty could be another area of focus. LVMH is said to be exploring the sale of Make Up For Ever and Fresh as it prioritises more premium labels such as Dior Beauty and Guerlain.
The group is also reportedly considering the future of its 50 per cent stake in Fenty Beauty, which JPMorgan has valued at between €1.5bn and €2.5bn.
The future of Marc Jacobs remains uncertain after talks to sell the fashion house to Authentic Brands Group for around $1bn reportedly broke down.
LVMH is also understood to be considering disposals outside its core luxury categories, including the French newspaper Le Parisien, which it acquired in 2015.
Despite the portfolio review, LVMH is not expected to step away from acquisitions entirely. The group is reportedly among the potential bidders for a minority stake in Armani, after being named as one of three preferred buyers in the will of the late Giorgio Armani.
However, any deal for Armani would require a significant investment and long-term turnaround plan, according to people familiar with internal discussions.
Arnault has meanwhile continued to signal confidence in LVMH’s prospects, purchasing further shares in the business this year. The Arnault family owns around 50 per cent of the group.
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