LVMH Profits Plunge, but it Will Still Buy Tiffany
July 30, 20
(IDEX Online) - The French luxury conglomerate LVMH says it still plans to buy Tiffany & Co, despite a plunge in profits because of COVID-19.
First-half operating profits for LVMH Moët Hennessy Louis Vuitton fell 68 per cent from $5.295bn to $1.960bn as travel restrictions halted the usual influx of high-spending Chinese and US tourists to Europe's fashion capitals, and the company was forced to slash spending on store leases, hiring and advertising.
But is still expected to respect the contract it has signed for the $16.2bn acquisition of Tiffany, the US jeweler.
The move would help consolidate its position in hard luxury after the $5.2bn purchase of Italian watchmaker Bulgari in 2011.
"Tiffany's results are clearly affected by the crisis," LVMH's chief financial officer Jean-Jacques Guiony told the French newspaper Le Figaro. "That said, we have signed a contract and we will respect it."