Louis Vuitton’s parent company LVMH bagged itself a deal on Friday, buying the global hotel group Belmond for $2.6bn (£2.1bn) in cash.
But it’s no stranger to the hotel business, as it already operates Bvlgari Hotels and Cheval Blanc, a small chain of boutique luxury hotels that it calls “maisons”.
Belmond owns and operates 46 hotel, restaurant, train and river cruise properties in 24 countries.
The move comes as consumer preferences have shifted towards memorable, Instagram-worthy experiences and away from traditional material goods.
“Consumers are moving from having more things to wanting more experiences. I think LVMH understands that,” said James Bidwell, a retail expert and co-founder of the consulting firm Re_Set. “They’re ahead of the curve in understanding what their customers want … It makes a lot of sense.”
One of Belmond’s most well-known properties is the Hotel Cipriani in Venice, Italy, which is a celebrity hotspot that has hosted the likes of George Clooney, Angelina Jolie and Brad Pitt.
“Belmond delivers unique experiences to discerning travellers and owns a number of exceptional assets in the most desirable destinations,” said LVMH chairman and CEO Bernard Arnault in a statement. “Its heritage, its innovative services, its excellence in execution and its entrepreneurship resonates well with the values of the group.”
“We are confident that, as part of LVMH’s world-class family of brands, Belmond’s ability to deliver timeless, one-of-a-kind luxury experiences will reach new levels,” Belmond’s CEO Roeland Vos said in a statement.
LVMH is paying $25 for each Belmond share in this deal, which Jefferies analyst David Katz said was a good price.
The $25 per share level is “not excessive given the trophy quality of the assets,” he said in advance of the deal being formally announced.
The takeover is expected to be finalised in the first six months of 2019, pending approval from shareholders and regulators.
Belmond announced in August it was looking for a buyer, which caused shares to spike by about 35%.
LVMH also has a range of other unlikely business interests. It owns a yacht-building business, along with a French radio station and some French news publications.
Shares in LVMH were slipping by about 2% on Friday morning as European markets experienced a bout of selling. Most major indices were dipping by about 1% or more in morning trading.