PARIS: LVMH, the French luxury goods group, is increasing investment in some of its smaller fashion brands and buying stakes in others to help offset slowing growth at Louis Vuitton, its biggest source of revenue.
Under the supervision of Delphine Arnault, daughter of chairman Bernard Arnault, the company is identifying fashion start-ups to acquire amid signs of a shift away from a policy of promoting its historic brands, the Wall Street Journal reported.
It has bought stakes in UK shoemaker Nicholas Kirkwood and designer J.W. Anderson and it is expected that other designers will be targeted.
The initiative follows in the footsteps of Kering, its French rival formerly known as Pinault-Printemps-Redoute, which has developed its Alexander McQueen and Stella McCartney partnerships into well-known brands.
And it could help boost the group following a disappointing performance from its fashion and leather business, which includes Louis Vuitton, where sales growth in the third quarter was less than expected.
Louis Vuitton, which was founded in 1854, is currently undergoing significant changes to its management with long-standing designer Marc Jacobs leaving, possibly to be replaced by Nicholas Ghesquiere, formerly at Spanish fashion house Balenciaga.
LVMH also has many other old names in its portfolio, such as Givenchy, Loewe and Emilio Pucci, which have struggled to maintain their appeal.
Industry consultant Stefano Simontacchi commented that "it may be easier to boost a new brand than to do a U-turn with an old brand".
Another advantage is that acquiring new labels or developing partnerships with them does not require huge investment, although there remains the risk that small brands can divert management attention.
Data sourced from Wall Street Journal; additional content by Warc staff