LVMH Acquires Belmond

Hopefully the first thing they will do will be to pay SNCF and bring back the revered Orient Express name. Renaming it Belmond brought absolutely nothing of value to the group.

Hopefully they dont trash these properties like they trashed/ sold out the Louis Vuitton name

Stayed at the Belmonds in Peru. They were generally good, but not all outstanding. Really liked the Belmond Miraflores Park in Lima but the others were less impressive for 5-star luxury standard.

We took the Belmond Hiram Bingham train to Machu Picchu and got engaged up there a few years ago. It was very nice, but a long day. About 4 hrs each way, plus the tour.

@Jason. I am not sure how LVMH sold out the Louis Vuitton brand, when LVMH itself was form by LV and nowadays has become by far the most powerful luxury brand in terms of both revenue and profit.

Not a big fan of what happened to Rimowa after it was taken over by LVMH.

@mason - LV use to be high end. They went really really trashy. It appeals to the masses, it's not the elegant discreet brand it was once. While it's a powerful brand, and appeals to the nouveau riche masses, those with true money and discretion look elsewhere.

I think they're building a Cheval Blanc in Paris as well in that nice art deco building on the Seine (I know...real specific...). It used to be a department store or something.

While I was hoping that Rosewood would acquire Belmond, I think this is about as good of an outcome as Belmond could have hoped for. The hotels will end up tricked out a bit to flog LVMH merchandise but have a better chance of remaining distinctive than if they had been swallowed by Marriott or Four Seasons -- and of remaining properly maintained than if they had been treated like Sheraton treated the CIGA hotels (later the core of Starwood's misfits and aging dowagers with the Luxury Collection). About six years ago, there was speculation that what was then Orient-Express Hotels would merge with Indian Hotels/Taj--not a bad fit, but Taj is a mess as an organization.

@Michael There is not a snowball's chance in hell of SNCF ever selling the rights Orient-Express name. They wouldn't sell it to Jimmy Sherwood or to Accor, which currently licenses the name for hotels. Also, as Orient-Express Hotels, what is now Belmond did a lousy job of creating a unified brand, as each hotel was marketed as a separate brand (and had its own web site). The Belmond rebranding attempted to create a single brand across the hotels.

Stayed at the La Residence in Cambodia - exquisite, refreshing and highly personalized stay. Enjoyed it very much, albeit for a steep price.

Well done on the investment analysis Lucky. Asset-heavy... Love the analysis, but yeah, not the strategy as-is. Lets see a 99 year management contract with a REIT spinoff!

@Jason:

Would agree and add that LV is targeting a very specific customer base these days: mainland Chinese. But LV is not alone in this given the rise of the (upper) middle class in China and newfound wealth - something often discussed on travel blogs as a result of the uptick in international travel and the rise of culture-specific faux pas aboard. If you take a look at any number of luxury brands/lines, you'll see patterns, designs, and colors skewing towards tastes unique to that region. Or, for a more basic understanding of target demographics, visit a brick-and-mortar location and note the ethnicities of and/or language(s) spoken by the salespeople on the floor.

LVMH is fantastic at mass producing "luxury" goods and branding. Veuve Cliquot NV Brut Yellow Label in all Belmond properties, with lots of cross selling opportunities! How this translates to Belmond will be interesting. I think the Starwood brand exiting the market has created a vacuum for a higher tier/medium sized chain with a robust loyalty program (dreaming maybe).

You guys complaining about LVMH being trashy or not being able to manage high end products, are you familiar with Cheval Blanc properties at all?

I wouldn't call LV trashy at all. There were always fakes, and there was always nouveau riche with their products. In Germany, until 10 years ago, if a young female was wearing it, it was either borrowed from her mom, or she was a prostitute. This has changed, even people otherwise unable to afford luxury goods, are willing to spend every last dime and forego their summer vacay for a single LV item. The business politics are brilliant, they never need to go on sale, everything they produce is being torn from their hands. But I do agree, they nowadays are gearing their offerings towards Chinese customers. It used to be be oriented towards Japanese customers 15 years ago.

@mason
Having high revenue and profit does not mean a brand hasn't sold out. LV used to be truly luxury, now it's just "luxury" canvas and monogram bags sold to nouveau rich and wanna-be. Is Wal-Mart a more luxurious brand because it has higher revenue and profit than LVMH?

It has been my experience that Belmond/Orient Express has always been a second or third-tier operation, despite their desperate airs of pretension. LVMH can't help but improve these properties.

It would be very interesting to see LVMH hopefully upgrading Belmonds all around. Some of the Belmonds are quite nice while the one by Machu Picchu entrance is astrocious. If they can make all Belmonds as nice as all the Cheval Blanc, especially like the one in Maldives, I’m all for it.

Bulgari, on the other hand, is managed by Marriott. Need I say more?

Glad they did not sell to a major chain. Don't have deal points travelers.

You forgot to mention the iconic Copacabana Palace in Rio is now under LVMH since the acquisition 😉

Btw, its Louis Vuitton Moet Henessey, hence the LVMH

everyone calling LV trash probably cant afford anything from there...its far from trash. its true luxury. if u dont like it dont buy it, just dont make ignorant comments about a respectable brand

@schar
It actually is overpriced trash, and not because people "can't afford it". The actual good stuff cost more than LV. Hermes, Brunello Cucinelli, Loro Piana, John Lobb (which is actually owned by LVMH, but hasn't gone the tacky LV route... yet) etc. comes to mind.

Enjoy your derivative, tacky LV wallet with logos plastered all over it though.