MORE ARNAULT DEALS: CAR RACING, ONLINE AUCTION, MAYBE WATCHES
Byline: Katherine Weisman
PARIS — Bernard Arnault continued deal-making in the fast lane Wednesday.
There was no official word on the reports that emerged Tuesday that the French tycoon who controls LVMH Moet Hennessy Louis Vuitton was teaming up with Prada’s Patrizio Bertelli to make a bid for Fendi (see related story, page 7), but the Arnault juggernaut was still in the news with a variety of developments.
Wednesday’s agenda included reports that LVMH could be making a bid for Swiss watchmaker Ebel. At the same time, LV Capital, an LVMH venture capital subsidiary, announced a partnership with Formula 1 Grand Prix driver Alain Prost. And to make sure things don’t get too quiet, Arnault’s Internet investment company, Europ@Web, disclosed two transactions.
As for Ebel, it’s no secret that the midrange watch brand owned by Investcorp is on the block. Speculation about the brand arose when the Swatch group purchased the high-end watch maker Breguet from Investcorp earlier this month, and people assumed that an Ebel deal would soon follow.
But industry observers have said that Investcorp has had a tough time selling Ebel since the company does not own any movement manufacturing capacity, often a strong source of revenues and profits. Apparently, LVMH looked at the property earlier this year and turned down a deal. But now, the luxury giant has had a change of heart — following its recent acquisition of Tag Heuer — and is examining the Ebel brand once again, according to a source close to the discussions. Others looking at Ebel are said to include Richemont and the Swatch Group. Spokesmen for LVMH and Investcorp could not be reached for comment.
The interest around Ebel has watch-industry insiders perplexed. Many feel that it is a product with weak brand recognition and foggy market positioning. Observers see as more tempting properties the high-end watchmaker Audemars Piguet or the three brands — IWC, Jaeger le Coultre and Lange und Sohne — controlled by LMH, a holding company for VDO, a large Swiss conglomerate that manufactures an assortment of mechanical parts.
On other fronts, LV Capital announced a merchandising partnership with Prost Development, the parent company of Alain Prost’s Formula One Grand Prix racing team. LV Capital and Prost will form a new company to create and market Prost-branded goods for international distribution. As part of the deal, LV Capital will take a 10 percent stake in Prost Development. Financial terms were undisclosed.
“Alain Prost’s reputation as a champion is well known throughout the world. We aim to combine the Prost name with our considerable brand development expertise, extensive knowledge of retail and global distribution network to achieve considerable success with Prost-branded products,” said LV Capital president Daniel Piette in a statement.
Prost said that his company has been eager to expand outside car racing. “In LV Capital, we have found impressive expertise in this area, combined with a level of professionalism which gives us real confidence in the success of this venture,” he said.
This is hardly LVMH’s first foray into sports and sports marketing. Its Louis Vuitton company is the organizer of the Louis Vuitton Cup sailing races. The Vuitton Cup kicks off Oct. 18 in Auckland, New Zealand.
In the Internet arena, Europ@Web announced that it has taken a majority stake in Aucland, France’s leading online auctioneer, with the aim of making the firm Europe’s number one Internet auction site. Terms of the deal were not revealed.
“We are very impressed with the quality of Aucland’s management team who in a very short time have managed to create the leading site of this type in France,” said Chahram Becharat, the European managing director of Europ@Web, in a statement from Groupe Arnault. Groupe Arnault is the family holding company of Bernard Arnault. “We are convinced that online auctions will become one of the leading commercial Internet applications of the future,” said Becharat.
Aucland, launched last April, boasts 1.5 million hits per month and has more than 20,000 items for sale. The site has a virtual sale room that permits buyers and sellers to meet in real time. Aucland plans to launch sites in England, Italy and Spain at the beginning of next month. The company is also developing partnerships and has 20 agreements under negotiation with portal sites and others who could offer Aucland’s service to their users, Groupe Arnault said.
A spokesman for Groupe Arnault also confirmed that Europ@Web had also made a $2.4 million investment in Lyon, France-based Compilo, a maker and database provider of multimedia geographic maps. Next month, Compilo is expected to launch geographic portals containing town-, city- and region-specific information on everything from air quality to traffic. Compilo is expecting to have sales of about $1.3 million at the end of 2000.