The Moët Hennessy Louis Vuitton (LVMH) group has sold its 49% stake in the Stella McCartney brand, five years after acquiring it. This move comes amid a reorganization of LVMH's brand portfolio, which has been suffering from a slowdown in the global luxury market.
In this new phase, the brand's founder, British designer Stella McCartney, will regain full control of the business. Details about the agreement have not been disclosed.
“This new chapter reflects Stella McCartney’s desire to write a new page in her story with complete independence, after having worked closely with the group to strengthen the foundations and governance of her home,” the companies said in a statement.
Despite going solo, the statement says McCartney will continue to hold the position of global ambassador for sustainable development, advising Bernard Arnault and the LVMH management teams on environmental issues.
Known for its sustainable approach, Stella McCartney was founded in 2001 through a joint venture with LVMH competitor Kering – owner of brands such as Gucci, Yves Saint Laurent, and Bottega Veneta. The partnership ended in 2018.
LVMH was responsible for the "push" in the designer's brand, which went through difficulties during the Covid-19 pandemic. In 2022, two years after the start of the crisis, McCartney continued to record losses in her sales, which totaled €46.2 million that year.
The turning point came when the brand hired a new leader, the head of the American fund Iconiq, Divesh Makan. Since then, the brand has managed to restore its numbers, reaching €200 million in sales in recent years.
Despite its strong performance, LVMH has been struggling with the decline in Chinese consumption of luxury goods, a problem that is not limited to the French giant's business.
Throughout 2024, sales of the market's leading brands registered significant losses. In the first half of the year, the market value of the major luxury brands had fallen by US$200 billion.
Despite a challenging environment, Morgan Stanley upgraded its recommendation for the LVMH group to "buy" last Monday, January 27th.
"Although LVMH is expected to face a number of challenges in 2025, the group's outlook has improved significantly in recent weeks due to more favorable industry dynamics, as well as company-specific factors (improved prospects for key brands such as Vuitton, Tiffany and Bulgari)," analysts said in the report.
LVMH is expected to release its fourth-quarter and full-year 2024 financial results on Tuesday, January 28. Currently, the group is valued at US$391.4 billion.
