LVMH Gives Designer Virgil Abloh Bigger Role, Buys Stake in Off-White
(Bloomberg) -- LVMH is entrusting rising star designer Virgil Abloh with the task of creating brands and pushing into new business segments, highlighting the luxury conglomerate’s desire to capture a younger, more diverse set of consumers.
As part of the agreement, LVMH will buy a 60% stake in Abloh’s street-style fashion brand Off-White for an undisclosed price. Besides his expanded role, Abloh will continue as the creative director of the Louis Vuitton menswear line, the French company said Tuesday.
LVMH founder Bernard Arnault is trying to stitch together the disparate parts of his empire, expanding recently with the purchase of a 50% stake in Jay-Z’s Champagne Armand de Brignac and preparing the September opening of a Cheval Blanc hotel next to La Samaritaine department store in Paris. Through L Catterton, a private equity fund backed by his fortune, Arnault also made notable purchases such as German sandal maker Birkenstock for 4 billion euros ($4.7 billion).
It’s a move away from the more traditional Dior and Louis Vuitton classics that made Arnault one of the richest men in the world. New ventures such as Off-White offset LVMH’s fashion and leather goods unit, which still makes more than 60% of total profit at the group.
Abloh, whose street-smart fashion stands in contrast with some of LVMH’s more traditional brands, is part of a new generation of luxury masterminds. LVMH will be able to help Off-White expand into new categories beyond fashion, according to Abloh, who said the goal of the partnership is more “disruption.”
The designer is becoming one of the most powerful Black executives in the luxury industry. LVMH, whose executive committee is all White and only includes two women, is betting that its collaboration with the social media star will help keep a finger on trends ranging from video games and streetwear to concerns about diversity and inclusion. Abloh has more than 6 million followers on Instagram, a lot more than other creative directors at Louis Vuitton and Christian Dior.
LVMH’s recent experiences with star-led brands haven’t always worked out. A collaboration to create a ready-to-wear line with Rihanna was suspended as the brand failed to attract enough customers during lockdowns.
Abloh met Michael Burke, the chairman of Louis Vuitton and Tiffany, during an internship at Fendi in 2007.
“By breaking down borders and proclaiming a profoundly inclusive philosophy, Virgil has extended the reach of Louis Vuitton’s luxury world,” Burke said in the statement.
The French luxury conglomerate founded by billionaire Bernard Arnault has weathered the pandemic better than peers thanks to its fashion and leather-goods unit. While the group is scheduled to report second-quarter earnings next week, analysts are already focusing on any guidance for the third quarter, wondering how the appetite for luxury is improving.
Concerns about the economic recovery sent stocks plunging on Monday with LVMH sliding 2.2%. However, the stock has still rallied 55% in the past year.
©2021 Bloomberg L.P.