Is the acquisition of Ralph Lauren by LVMH a good idea?

After Tiffany & Co. and the investment in Aimè Leon Dore, the LVMH group would have begun preliminary discussions aimed at the acquisition of the American giant Ralph Lauren. The news seems quite well-founded and, even if surrounded by a thick halo of potential, the simple bulk of the Ralph Lauren universe, which today sits on an enterprise value of just under eight billion, would not only be one of the largest acquisitions in the history of the fashion industry but would have a fundamental role in cementing LVMH's position in the increasingly essential American market. According to Axios, who reports the news, the move would make sense on the part of Ralph Lauren as it would secure the future of the company and crown the designer's ultimate success.

With LVMH, in fact, Ralph Lauren's huge empire would be in relatively safe hands – the Arnault family is not only comfortable in the luxury industry, but owns a considerable portion of it. According to Forbes' hypotheses, the idea could be to lead the brand towards even higher markets but above all to gain an increasingly strong grip on American fashion, represented in the group's portfolio already by Marc Jacobs, Fenty and Tiffany & Co. At the current stage of things, moreover, Forbes predicts that the news of an acquisition could make the group's market value skyrocket and would also offer the Arnaults a significant advantage over rival Kering.

If it were real, the deal could not only rewrite the hierarchy of the luxury industry but could also start a chain wave of mergers and acquisitions by industry groups, giving a new boost to that buying and selling of brands that started at the beginning of last year and then stopped in the second half of 2021. And although some more mischievous hypotheses suggest that the news is actually a leak designed to attract new bidders, in case Ralph Lauren really wants to sell it is likely, as Forbes suggests, that a possible announcement will come within the next three months. The lack of news by that date could be interpreted as a failure of the negotiations – but not their arrest.