LVMH hits pause button on Rihanna’s fashion brand

Louis Vuitton owner LVMH and music star Rihanna have agreed to suspend her fashion line Fenty less than two years after its launch, the French luxury goods giant said on Wednesday.

LVMH said in a statement that Fenty’s ready to wear activity, based in Paris, would be “put on hold” pending better conditions – a rare setback for the luxury group, which has weathered the coronavirus crisis better than most rivals.

The R&B singer and LVMH launched the Fenty fashion brand in May 2019, only the second time the French group had set a label up from scratch as it looked to tap soaring demand for luxury celebrity collaborations.

LVMH did not elaborate on the reasons for hitting the pause button but after a big launch and debut collection, the brand kept a low profile and never followed up with major marketing events, even before the Covid-19 crisis.

Trade publication WWD, which first reported news that the label was being suspended, said on Wednesday that a skeleton staff remained at the Paris headquarters to wind down remaining operations.

Asked about the fashion venture during the group’s third quarter earnings call last October, LVMH’s finance chief Jean-Jacques Guiony called it “a work in progress”. “We are still in a launching phase, and we have to figure out exactly what is the right offer” Guiony said. “It’s not something that is easy.”

LVMH also said on Wednesday that private equity fund L Catterton, which is connected to the group, had taken a stake in Savage X Fenty, Rihanna’s lingerie line.

“LVMH and Rihanna reaffirm their ambition to concentrate on the growth and the long-term development of Fenty ecosystem focusing on cosmetics, skincare and lingerie,” it added.

Rihanna attends Fenty Beauty's one-year anniversary at Sephora in New York in 2018

Rihanna attends Fenty Beauty’s one-year anniversary at Sephora in New York in 2018

Credit: Kevin Mazur/Getty Images North America 

Fenty – after the Umbrella hitmaker’s full name, Robyn Rihanna Fenty,  was meant to build on the singer’s joint cosmetics venture with LVMH, with a full range of clothing, shoes and accessories.

It was the first label the acquisitive group – also home to storied couture houses such as Christian Dior and Givenchy – had fully created since Christian Lacroix’s eponymous brand launched in 1987. It eventually sold that on in 2005 after it struggled to ever turn a profit.

Stock market cakewalk for catwalk giant 

The decision to hit the pause button on the singer’s brand came as LVMH shrugged off the pandemic to become the largest company listed on European stock markets.

The French luxury goods business jumped ahead of Swiss food giant Nestle, owing to resilient Asian sales last year, data showed. LVMH enjoyed a market capitalisation of €271bn (£238bn) compared to Nestle’s €265bn (£232bn) based on midday trading. 

LVMH is comprised of the leather goods maker Louis Vuitton and champagne and spirits group Moet-Hennessy, but it also owns brands such as Kenzo, Guerlain, Fendi, Celine, Chaumet, Sephora and Bulgari.

Its most recent high-profile acquisition is the US jeweller Tiffany.

LVMH closed a $15.8bn deal for Tiffany at the end of last year after a bitter saga that saw it lower the purchase price by $425m due to the pandemic

LVMH closed a $15.8bn deal for Tiffany at the end of last year after a bitter saga that saw it lower the purchase price by $425m due to the pandemic

Credit: Kirsty Wigglesworth /AP

LVMH shares were pummelled in February and March 2020 when the coronavirus pandemic hit, but by early November they had bounced back, and finished the year with a gain of almost 24pc at €510.90.

Since January 1 they have risen by almost 5pc more.

Regis Begue, senior trader at Lazard Freres Gestion, told AFP that once it became clear Asia would weather the Covid-19 outbreak better than other parts of the world, luxury stocks went on a tear.

Luxury groups with a strong presence there enjoyed “an exceptional market ride”, Begue said.

Another trader, Arnaud Cadart at Flornoy, told AFP that LVMH’s rise to the top of the European market “is a kind of consecration” for the company.

The group registered 34pc of its sales in Asia last year, compared with 24pc in the United States, and has managed to boost online sales as visits to its various shops declined.

“LVMH products are also ones you treat yourself to. And a large amount of savings was accumulated by wealthier groups that were somewhat spared by the crisis,” Cadart said.

“A Vuitton bag or Christian Dior outfit is something that could replace the trip or restaurant you could not do in 2020,” he remarked.

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