LVMH Robbed Germany's High-End Luggage Brand RIMOWA

The largest in the world

The French LVMH announced that it has agreed to buy a controlling share of 80% of Germany's high-end luggage brand RIMOWA (640 million).

This is also the first acquisition made by LVMH group in Germany.

According to the expected sales volume in 2016, the overall valuation of the acquisition of LVMH to the RIMOWA company (800 million euros) is about 2 times of annual sales, which is obviously lower than the valuation multiplier given by Samsonite at the beginning of the year when buying Tumi, which should be regarded as a very cost-effective paction.

Since its inception, RIMOWA has always been one of the most innovative brands in the luggage industry.

The seller of this paction is the grandson of RIMOWA founder Paul Morszeck, the incumbent CEO Dieter Morszeck of the brand.

After the paction is completed, he will continue to hold part of the company's shareholding and continue to be the leader of the brand.

In addition, LVMH Group Chairman and CEO Bernard Arnault's youngest son Alexandre Arnault will become RIMOWA's joint CEO, which is jointly responsible for the daily operation of the company with Dieter Morszeck.

RIMOWA's latest innovations are closely linked to high technology:

"RET".

The latest technology developed by RIMOWA is using a digitized data module instead of traditional paper labels on suitcases.

RIMOWA conducted extensive testing on the technology in 2015, and will be officially launched in 2016. The cooperation with Lufthansa, Germany, has opened the door for the commercial application of RET.

RIMOWA brand aluminum main suitcase is priced between 300 and 600 euros, and is very popular among Chinese tourists.

Regarding the deal, Dieter Morszeck said, "in the past two years, I have established close cooperation with the Arnault family, and have conducted a lot of in-depth discussions with Alexandre Arnault about the development of the company.

I am very glad that he will join my company. I believe we will bring together a bright future for the company. "

"I have been a loyal user of RIMOWA for many years and have made great contributions to the development of suitcase industry.

I am honored to be one of them. "

Bernard Arnault said: "RIMOWA is a storied company with a unique history.

Like LVMH group, they are full of innovative spirit and hope to bring the highest quality products to consumers.

I am glad that they can become our first German company.

In addition, while preparing for the deal, Dieter Morszeck also founded a foundation called RIMOWA Dieter Morszeck Foundation.

A portion of this paction will be donated to this foundation to provide support for scientific research, public health, education and humanitarian projects in Germany and around the world.

The paction also needs approval from the relevant regulatory authorities, which is expected to be completed in January 2017.

Although the overall growth rate of the luxury goods industry is slowing down, analysts expect that the growth of tourism related high-end luxury goods will remain strong.

Earlier this year, Samsonite (Samsonite), the world's largest travel and luggage group, bought Tumi, a luxury luggage brand located in New Jersey, USA at a price of 1 billion 800 million US dollars.

Media reports: "$1 billion 800 million! Samsonite, the bag and bag boss Samsonite acquired the luxury brand Tumi, the future attack on the Asian market". At that time, the overall valuation of Tumi by Tumi (US $1 billion 800 million) was 3.3 times that of Tumi 2015 sales ($550 million).

"Before Samonite bought Tumi, plus the acquisition, there is no luxury suitcase brand worth buying in the market."

Luca Solca, an analyst at Exane BNP Paribas, said: "the development of tourism will continue to promote the trunk industry."

After the announcement, LVMH's shares rose 1.09%, better than the 0.79% increase in the CAC-40 French blue chip index.