French billionaire Bernard Arnault will combine the Christian Dior fashion brand with his LVMH group as part of a multi-billion-euro takeover aimed at harnessing the "high growth potential" of the iconic brand.
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LVMH, which already owns Christian Dior perfumes, said in a statement on Tuesday it had now agreed to buy Christian Dior Couture for 6.5 billion euros ($7.0 billion).
Under a series of complex transactions, LVMH luxury goods group will buy the company - best known for the leatherware, Haute Couture, ready-to-wear, jewellery and shoes businesses - in addition to acquiring a 25.9-percent stake in Christian Dior SA holding company it doesn't already hold.
LVMH was offering 260 euros per share, the company said - a premium of 15 percent over Monday's closing price and raising the value of the deal to 12 billion euros.
The announcement sent LVMH shares soaring on the Paris stock exchange, where they jumped by around three percent in a generally flat market.
The evolution of Christian Dior's revolutionary New Look
Only two years after the end of World War II, the French couturier presented a collection that symbolized not only a departure from previous styles, but the beginning of a new society.
Image: L. Hamani
The birth of the icon
On February 12, 1947, Christian Dior presented his debut haute couture collection in Paris. Immediately dubbed as the "New Look," its most prominent features included rounded shoulders, a cinched waist, and a full, A-line skirt. With its clearly articulated feminine silhouette, the "Bar" suit (picture) was one of the most recognized ensembles of the late 40s and early 50s.
Image: L. Hamani
Everybody wants to wear Dior
Dior's New Look became instantly popular among the couture clientele, and the middle class followed quickly. Women in Europe and the US would go to salons and ask seamstresses to emulate Dior's style for a fraction of the couture price. To stay ahead of the game, Dior would change his style every year: His Fall 1948 collection emphasized the neckline and played with embroideries.
Image: L. Hamani
The more the better
After World War II, the New Look intended to revive the lavish fashions of the 19th century and the French Belle Époque. In 1949, Dior made his point clear with a fall collection inspired by the Roman mythology for which he embellished dresses with ombréed petals, sequins, rhinestones, and pearls. The "Junon" dress is still being copied by various dressmakers to this day.
Image: L. Hamani
The vertical line
At the beginning of the 50s, Dior's style went through some degree of transformation. Increasingly inspired by men's tuxedos and by his numerous trips to the United States, he conceived a more streamlined and modest silhouette for his Spring 1950 collection - although some styles still maintained the characteristic New Look volumes.
Image: L. Hamani
Elaborate simplicity
Newly found lightness and simplicity defined Dior's collections in 1951, even though nothing is ever really simple when it comes to haute couture. Dior might have replaced strict tailoring for fluid draping that year, but the neckline, for instance, would be constructed by an elaborate system of invisible wires to hold together its form
Image: L. Hamani
The silver lining
In contrast, Dior adopted a rather rigid style in 1952. The dresses had very sharp contours and grasped the body. The contradiction between the solid line and the romantic brocades, highlighted by the use of silver and gold threads, would create a literally breathtaking experience for the wearer as well as for the observer.
Image: L. Hamani
The Tulip line
When Dior wasn’t working in his ateliers in Paris, he would come to his hometown of Granville, France, where he would dedicate his time to gardening. His enthusiasm for horticulture led to flower-inspired 1953 collections of mostly monochromatic looks with voluptuous dimensions that once again liberated the body.
Image: L. Hamani
Dior among socialites
"H is for horrid or heavenly," wrote one journalist about Dior's H-line silhouette, the controversial slim-fitting shape with a straight, narrow cut that falls to or just below the knee, which was introduced in his Spring 1954 collection. However, many wealthy American women came to Paris to buy Dior that year, so he balanced the act with glamorous dresses for debutantes and their mothers.
Image: L. Hamani
Looking forward
A shift in style was apparent at Dior in the mid-50s. The daily wear became almost minimalist, inspired by men's wardrobe again, and the evening wear was composed with ease. He replaced rigorous understructures with almost architectonic, hand-shaped constructions, but that didn't mean his creations lost anything of their opulence.
Image: L. Hamani
A new blood
The change in Dior's work was, no doubt, caused by his new first assistant, the young Yves Saint Laurent, who was hired in 1955. Since then, Dior started to drift away from the New Look line. The cuts got boxier, ignoring the bust, waist, and the hips. As it is visible from this dress from 1956, nonetheless, the demand for the classic Dior pieces was still huge.
Image: L. Hamani
Young, fresh, and new
On March 4, 1957, Christian Dior became the first couturier to appear on the cover of "Time" magazine. In just 10 years, Dior grew into a leading fashion authority. After his sudden death the same year, Saint Laurent was named his successor, and despite his short stay, he injected the house with the young spirit, which allowed the brand a smooth transition to the Swinging Sixties.
Image: L. Hamani
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Clearer structures
The transactions would allow "the simplification of the structures, long requested by the market, and the strengthening of LVMH's Fashion and Leather Goods division," the Arnault family, which holds 47 percent in LVMH, said in a statement.
In the view of LVMH, the 70-year-old fashion label was "one of the most iconic brands worldwide," selling a range of goods "almost exclusively" in 198 luxury boutiques around the world.
Christian Dior Couture sales have doubled over the past five years, and last year revenues amounted to more than two billion euros, while underlying or operating profit totaled 270 million euros.
By making it a wholly-owned subsidiary, LVMH would be able to unlock its "high growth potential," the LVMH statement said. "The development of Christian Dior Couture will be notably supported over the coming years by a new creative momentum and significant investments already completed, notably in America, China and Japan," it added.
Market analysts also hailed the long-awaited deal. In a research note, analysts of Barclays Bank spoke of a "good acquisition", saying the "strong brand Christian Dior" would be reunited with LVMH's "very profitable" perfume business.
Exane BNP Paribas analyst Luca Solca also sees "a number of positives," saying in a statement that the deal "adds a strong brand to the LVMH portfolio at a reasonable valuation." Furthermore, it would reduce the "risk of LVMH potentially buying 'trophy assets'," which would dilute returns on capital, he told the news agency AFP.