This content was first published on IGR – Italian Gemological Review no. 11 in 2021. The information provided here is therefore current as of the original publication date.
The luxury industry is evolving and the reshaping is in full swing. New consumers, the so-called HENRYs (High-Earners-Not-Rich-Yet), the Millennials and the gen Z as well as new markets such as India and China are emerging. Huge investments are required on digital technologies, such as Artificial Intelligence (AI) and Big Data, which are helping redesign customer engagement techniques through data analytics.
A deep process of brand concentration is underway to facilitate investments in a economy of scale. In 2011 the €3.7 billion acquisition of the prestigious Italian jewelry brand Bulgari by the French giant LVMH Moët Hennessy-Louis Vuitton caused a strong sensation. Yet apparently that was just the beginning.
In a statement on its website dated January 7, 2021, LVMH has confirmed the successful completion of its US$15.8 billion acquisition of another iconic brand, the American jeweler Tiffany & Co. This acquisition came after a courtroom battle ended by LVMH’s successful renegotiation of its previous offer after the pandemic economic crisis of the first half of 2020. Jewelry was LVMH’s smallest division and the operation shows that it has an increasing role in the field of luxury goods that is currently dominated by cosmetics.
As a matter of fact the jewelry brand fragmentation is perceived as problem by the luxury sector if branded goods will seemingly rise soon to 30% of total jewelry sales.
After all the fact that in China the leading branch among all luxury goods is jewelry is an indication. Eight out of the nine luxury goods companies based in China and Hong Kong are jewelry brands. The acquisition of Tiffany is in the headlines but less is known on the performance of HK based Chow Tai Fook Jewelery Group Limited. It recorded in 2017 total sales amounting to US$7.575 billion, almost double compared to Tiffany (US$4.170 billion).
Gem News published on IGR – Italian Gemological Review #11, Winter 2020-21
