On October 4, 2016, it was announced that French luxury conglomerate LVMH Moët Hennessy Louis Vuitton SE (“LVMH”) is acquiring an 80 percent stake in German luggage company RIMOWA from Dieter Morszeck, RIMOWA CEO and grandson of the founder, for €640 million ($716 million). With estimated revenues of €400 million in 2016, LVMH is paying a multiple of two times revenues. The transaction, which is subject to approval from competitive authorities, is expected to close in January 2017.
RIMOWA is the first German brand to be acquired by LVMH. The German luggage company has recorded impressive growth over the last 15 years after the launch of the first polycarbonate suitcase. Revenues grew at an average rate of 23 percent per year from about €20 million in 2001 to €350 million in 2015. With around 3,000 employees, RIMOWA sells its products in 68 countries through its own stores and through wholesale.
Upon completion of the acquisition, 24-year-old Alexandre Arnault, son of LVMH Chairman Bernard Arnault, 67, will assume the role of co-CEO alongside current CEO Dieter Morszeck who is retaining a 20 percent equity stake in the business. Alexandre becomes the third of Bernard Arnault’s children to take a leading role at LVMH. Delphine Arnault, 41, heads Louis Vuitton and Antoine Arnault, 39, is the CEO of Berluti and chairman of Loro Piana.
Founded in Cologne, Germany by Paul Morszeck, RIMOWA is one of the best known companies in the luggage and leather goods industry. The brand name “RIMOWA” is derived from “Richard Morszeck Warenzeichen“ (the name of the founder’s son and the German word for trademark). RIMOWA was the first company to launch an aluminum suitcase. The luggage’s parallel grooves, inspired by those on the German Junkers aircraft, made the product instantly recognizable. Dieter Morszeck was responsible for the introduction of the first waterproof metal case in 1976 which became an instant hit with filmmakers, photographers, and journalists around the world. In 2000, the company launched the first polycarbonate suitcase. In 2016, RIMOWA and Lufthansa launched the first electronic luggage tag—built directly into the suitcase.
Sources: RIMOWA, Business of Fashion, The New York Times, Bloomberg, Tagesschau.de, Die Zeit Online
Photo credit: charnsitr / Shutterstock.com