LVMH exits from jewellery joint-venture with De Beers
LVMH has reached an agreement for the sale of its stake in the De Beers Diamond Jewellers (DBDJ) joint-venture company to its equal-share partner, South African diamond giant De Beers. The news was reported in an internal communiqué, confirming the rumours that appeared recently in the specialised press. The sale, whose value was not disclosed, will have immediate effect.
The French luxury group emphasised that both partners are likely to benefit from the transaction. It will in fact allow LVMH to focus on its own jewellery labels (Bulgari, Chaumet and Fred), while De Beers will be able to integrate the retail business stemming from the joint-venture within its own diamond-related empire.
DBDJ is a UK-incorporated company, in which both partners held a 50% stake. It was set up in 2001 to allow LVMH to strengthen its position in the jewellery business, by establishing and managing the De Beers jewellery retail chain, while the South African group, the world's number one in the diamond business, would in turn be able to exploit the French luxury group's huge distribution network.
In the meantime, in 2011 LVMH acquired Italian fine jewellery label Bulgari, which it recently endowed with a new, ultra-modern, high-performance manufacturing site, investing an estimated €35 million for it. The Bulgari acquisition muscled up Bernard Arnault's presence in the jewellery sector, until then a weak point since LVMH only owned Fred and Chaumet.
As a result, the French group is now a major player in the industry: in 2016, its watch and jewellery business was worth €3.468 billion in sales, and grew by 5%.
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