Luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton has agreed to purchase an 80% stake in German suitcase maker Rimowa for €640 million, or about $717 million, according to a press release.
Rimowa, famous for its ribbed aluminium suitcases, is a favourite of celebrities around the world, including Martha Stewart, Kanye West, Kim Kardashian, Will.i.am, Gwyneth Paltrow, and Kate Upton.
Started in Cologne, Germany, it created the first aluminium case in 1937 and the first lightweight polycarbonate case in 2000, according to the BBC.
“Rimowa is a brand with a unique heritage,” Bernard Arnault, CEO and chairman of LVMH, said in the release. “We share with [Rimowa CEO] Dieter Morszeck the same passion for innovation and a common desire to offer very high-quality products derived from a European tradition of craftsmanship.”
The cheapest of Rimowa’s offerings cost about $400, but larger cases can reach over $1,000, which is still significantly less than a comparably sized Louis Vuitton-branded case. The polycarbonate suitcases come in a range of colours from dark green to bright red, while the aluminium models come in different shades of silver and beige. Recent models of the bags are equipped with Bluetooth connections and electronic tags that let travellers check in their bags at home, then skip the line once they get to the airport.
A LVMH spokesperson told The New York Times that it expects to hit about $450 million in revenue this year. Rimowa now has 140 stores around the world.
Arnault is installing Alexandre, his 24-year-old son, as co-CEO of the brand along with Morszeck, the grandson of Rimowa’s original founder. Morszeck will keep the remaining 20% stake in the company, according to the Times. Rimowa will be added to LVMH’s stable of luxury brands, which includes Tag Heuer, Givenchy, Dior, Moët & Chandon, Marc Jacobs, and Sephora.
This solidifies LVMH as the second-largest luggage maker, with about 6.5% of the global market, according to Euromonitor via Bloomberg. Samsonite, which acquired luxury brand Tumi earlier in 2016, still has the lion’s share with about 17%.
— Martha Stewart (@MarthaStewart) September 23, 2016
Business Insider Emails & Alerts
Site highlights each day to your inbox.