LVMH Moët Hennessy Louis Vuitton will take a minority stake in Italian glasses-maker Marcolin SpA as part of a plan to expand the eyewear production for its luxury brands - which include Louis Vuitton, Givenchy, Celine, Loewe, and Marc Jacobs, among others, according to Reuters. The world’s largest luxury-goods company may buy 10 percent of Marcolin, thereby valuing all of Marcolin, owned by PAI Partners, a leading private equity investor in the French market, at as much as 500 million euros ($531 million).
LVMH will own 51 percent of the joint venture and Marcolin the rest. As part of the deal, LVMH will subscribe to a reserved 22 million euro ($24 million) capital increase at Marcolin, taking a stake of around 10 percent. Such a deal will enable LVMH to get more control over the production process at the company, which currently manufactures its Emilio Pucci line of glasses, which makes sense given the larger movement amongst luxury brands, which have been buying up their suppliers in an effort better to control their supply chains.
The move - which comes on the heels of rival Kering bringing its eyewear business in-house in 2014 - may ultimately make Marcolin a production hub for its other LVMH brands, including Celine, the latter of which moved to formally ended its licensing deal with Safilo Group in December. Still yet, the agreement could also involve investing in Marcolin’s Italian manufacturing operations, as well as the creation of a new company that could eventually absorb all of LVMH’s eyewear licenses, according to Bloomberg.
The deal comes just on the heel of the merger between Essilor International SA and Luxottica Group SpA - the latter of which maintains a brand portfolio that includes practically every well-known brand, such as Ray-Ban, Persol, and Oliver Peoples, as well as the rights to design, manufacture, and distribute eyewear of luxury brands including Burberry, Prada, Chanel, Miu Miu, and Versace – for about 22.8 billion euros, combining the largest eyewear manufacturer and retailer.