South African diamond giant De Beers yesterday confirmed the formation of a worldwide joint retail venture with French luxury goods conglomerate Louis Vuitton Moët Hennessy [WAMN: 9-Jan-01].
Although the partnership will be 50/50 owned, its day-to-day management is the sole prerogative of LVMH, headed by managing director Myron Ullman. "A small number of flagship retail stores" will be launched in some of the globe’s major cities over the next twelve to eighteen months.
The duo aim to make waves in the world’s somnolent retail jewellery market, which currently spends a mere one per cent of sales revenues on marketing – versus 10% spent by luxury goods retailers and manufacturers.
The new stores, says De Beers chairman Nicky Oppenheimer, "will create a more competitive market for diamond jewellery," selling De Beers-branded diamond baubles and related luxury items.
The venture will not lack adequate funding: De Beers controls some 60% of world sales of uncut diamonds, while LVMH is the globe’s largest luxury goods distributor, owning brands such as Louis Vuitton, Christian Dior and Moët & Chandon.
News source: Financial Times