PARIS — LVMH Moët Hennessy Louis Vuitton is on the hunt for emerging brands to invest in.
The French luxury conglomerate — parent of brands including Louis Vuitton, Givenchy, Guerlain and Sephora — has created a new investment entity, LVMH Luxury Ventures, and designated Julie Bercovy, its deputy head of mergers and acquisitions, to lead it, WWD has learned.
With an initial envelope of 50 million euros, or $54 million, Bercovy has been empowered to take minority stakes in early-stage luxury brands that have high growth potential and compelling business models. The appointment is effective immediately.
The idea is for LVMH to invest between two million and 10 million euros, or $2.1 million to $10.8 million, at a time for stakes of 15 percent to 20 percent in companies in the fields of leather goods, watches and jewelry, accessories, and perfumes and cosmetics, according to a source with knowledge of the matter.
These companies are considered too small to warrant attention from LVMH’s M&A division, but are increasing in number due to lower barriers for entry and new distribution models.
The new entity differs from L Catterton, the venture capital and private equity firm in which LVMH and Groupe Arnault hold a 40 percent stake, in terms of structure, size and orientation, since L Catterton targets mainly lifestyle and accessible luxury firms.
The aim is not for LVMH to ultimately absorb these companies, but rather to act as an alternative to existing venture capital firms and provide strong support and financing for these brands at a critical stage of their development, the source said.
It aims to assist the companies in defining their strategic vision and development plans in order to help them accelerate their growth and stand the test of time. Each will be managed independently, with Bercovy providing advice as needed.
It is understood that the HEC business school graduate, who joined LVMH in 2004 from investment bank Lazard Frères and has worked on major acquisitions including the takeovers of Bulgari and Hublot, is in no hurry to make her first investment, preferring instead to take the time to assess potential targets.
Similarly, LVMH has no set time frame for exiting the companies it invests in, although the aim is for all its investment to generate a return.
LVMH Luxury Ventures will join existing players Mode et Finance 2, the French investment fund managed by state-owned bank Bpifrance, which has invested in brands including Le Gramme, Officine Générale and Lemaire, and Experienced Capital Partners, the investment firm founded by former Sandro, Maje and Claudie Pierlot executives Frédéric Biousse, Elie Kouby and Emmanuel Pradère, which is active mainly in the accessible luxury segment.