A recent spate of deals indicate that the world’s leading luxury groups are looking to get out of their comfort zones in an effort to beef up their defenses against rivals and tap new consumer bases, especially in still-growing markets like China. But beyond that, these strategic plays suggest a sense of urgency among luxury giants to branch out and invest in traditionally weaker areas.
Kering’s newly announced acquisition of the family-owned Danish eyewear brand Lindberg reflects how the French conglomerate could be aiming to reduce its dependence on Gucci while addressing a potential gap in its luxury eyewear division. As Roberto Vedovotto, head of Kering Eyewear, told the Financial Times, the purchase of Lindberg “showed that [Kering] was serious about investing in the high-end eyeglasses market,” which Vedovotto estimates is worth around €4 billion ($4.7 billion) in retail revenue per year.
Previously, Kering’s strength in eyewear centered entirely around branded eyewear for its luxury and lifestyle brands in its portfolio through the Kering Eyewear division, which produces eyewear for 15 Kering-owned brands, including Gucci, Cartier, Saint Laurent, and Bottega Veneta.
But Kering had a gap in that it lacked a dedicated high-end eyewear brand like Lindberg, one with a strong global presence and existing name recognition among high-end consumers, including in China, where it has an existing footprint in China and Chinese-language website. The Lindberg purchase offer Kering is a turnkey opportunity to deepen its eyewear presence in China, a market poised to power the growth of high-end eyewear for years to come thanks to its vast population, which also has the world’s fastest-growing rates of myopia.
Another recent move, Richemont’s purchase of the 192-year-old Belgian leather-goods brand Delvaux, hints at how the Swiss luxury group is looking to continue its diversification away from its core competency in “hard luxury” (jewelry and timepieces) toward more accessible accessories and lifestyle goods. The latter two are areas of particular strength for rival LVMH (both globally and in China) where Richemont has lagged in comparison. Of the 26 maisons now owned by Richemont, only a handful (such as Dunhill, Serapian, and Chloé) specialize in leather goods.
Read More at https://jingdaily.com/are-luxury-mas-long-term-china-plays-in-disguise/