A little late in the day to post about this, but I've been meaning to write about what Louis Vuitton could gain by picking up a 20 per cent stake in the decidedly middle-range Indian leather hangbag and accessories brand Hidesign.
Now that I've given it some thought, I've realised this: In a market that is growing increasingly spendthrift (plenty of young, single men and women with high disposable income), it's nothing but good news for a conglomerate that manufactures luxury goods.
The way the Pondicherry-based Hidesign sees it, a high-end brand needs a touch of exclusivity. By offering LVMH a stake, the brand is seeking a greater understanding of manufacturing leather goods and a leg-up in new markets. With the might and prestige of LV behind it, this is a sureshot winner.
As for LV, Hidesign could be it's answer to the mass luxury brand (if there is such a paradoxical thing) Coach. The US-based brand has been making an increasing dent in LV's customer base and bottomline, considering its prices are far cheaper than both LV and other brands in LVMH's portfolio. Using Hidesign to combat competition from mass luxury brands by positioning it as one is indeed a clever strategy.
Someone remind me why I'm not working for LVMH please?
Image courtesy: Reuters
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