What happened
Swiss luxury conglomerate Richemont will continue to expand its leather goods empire by acquiring the Belgian luxury leather goods house, Delvaux.
The Belgian Maison was previously owned by the Hong Kong-based billionaire brothers Victor and William Fung in partnership with Singaporean state investment company Temasek.
Delvaux, known by fashion connoisseurs as the oldest luxury leather goods house in the world, is a veritable gem. According to a Richemont press release: “Delvaux was the first to file an official patent for a leather handbag and can thus be called the inventor of the modern luxury handbag.”
Richemont believes that through this acquisition, Delvaux will be better positioned for its next stage of development.
The Jing Take
This acquisition is a win-win, and we believe both sides entered into it intending to build a long-lasting partnership.
By expanding its leather goods portfolio, Richemont made a strategic move that will grant the Swiss conglomerate the power to push back against competition from LVMH. Considering that Bernard Arnault’s empire has a more dominant position in high-end leather goods and accessories, Richemont's move shows that it is serious about business consolidation.
This purchase follows a joint-venture with Alibaba to invest 1.1 billion in Farfetch and shows that Richemont is eyeing expansion in the Chinese market. Considering that the Chinese love to splurge on jewelry, bags, and small leather accessories, this Delvaux acquisition appears to be a good fit.
Meanwhile, Delvaux can further bolster its market position by gaining access to a young, global demographic that appreciates the brand's heritage and craftsmanship. We foresee this merger improving overall brand performance by expanding Delvaux’s product offerings.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.