Luxury goods giant LVMH has inked a deal to buy luxury hotel group Belmond for $3.2B.
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Belmond, formerly known as Orient Express Hotels, owns or manages hospitality properties in various high-end destinations, including hotels but also tourist trains and river cruise operations.
The move represents an expansion for LVMH — which is owned by France's richest man, Bernard Arnault — in the hospitality sector.
Currently the company owns three Cheval Blanc hotels and a few others, but by far most of its business is in carriage-trade goods, such as fashion, perfumes, cosmetics, alcohol and jewelry, including such brands as Louis Vuitton and Christian Dior.
The company also operates such retail brands as DFS stores (Duty Free Shoppers), cosmetics retailer Sephora and Le Bon Marche Rive Gauche in Paris.
With the acquisition, LVMH is betting on the future of the global luxury market, which increasingly is going experiential, Forbes reports.
Currently Belmond owns or manages 36 hotels with a new one in development in London, and one restaurant, the 21 Club in New York.
With the acquisition of Belmond, LVMH will have the only hotel within Machu Picchu in southern Peru, Hotel Splendido in Portofino on the Italian Riviera and the Copacabana Palace in Rio de Janeiro, among other experiential-oriented luxury properties, the Irish Times reports.
“While some investors may question the acquisition, which appears to lie outside LVMH group’s core operations, we believe it is consistent with its long-term strategy focused on offering the consumer a full spectrum of luxury experience,” Hamburg, Germany-based Berenberg Bank analysts said in a research note, as reported by the IT.
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