French luxury group LVMH is planning to sell its Marc Jacobs fashion brand as demand for high-end products falls. The Paris-based company, which owns popular names like Louis Vuitton, Dior, and Moet Hennessy, is reportedly in talks with potential buyers. One of them is Authentic Brands, the company that owns Reebok.
LVMH has owned Marc Jacobs since 1997. However, the brand is considered one of its smaller labels. Sources say the discussions are still ongoing and there is no final deal yet. Both LVMH and Authentic Brands have not commented publicly on the matter.
The luxury market has been struggling recently. LVMH’s share price has dropped by 19% over the past year. This is due to several reasons, including lower spending by Chinese shoppers, economic uncertainty, and price hikes that pushed away American customers.
Last week, LVMH shared its earnings report for the first half of the year. The company’s operating profit fell by 15% to just over €9 billion (around US$10.44 billion). While this was slightly better than experts had expected, it still reflected the slow luxury market.
The fashion and leather goods section of LVMH — its core business — also saw a sharp drop in sales. This shows that luxury buyers are now more cautious with their spending.
Cecile Cabanis, LVMH’s finance head, said during a recent earnings call that the group may sell brands that no longer fit well in its portfolio. Last year, LVMH sold its stakes in two other fashion brands: Off-White and Stella McCartney. “We won’t keep brands that we feel are not the right match for us,” Cabanis explained.
Marc Jacobs, the brand’s founder, launched the label in 1984. He also worked as LVMH’s creative director from 1997 to 2014. The brand is famous for its luxury handbags and accessories.
In recent months, other fashion giants have also made moves. For example, Prada bought Versace for US$1.38 billion in April, which was $200 million less than the originally discussed price.
