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When the world’s biggest luxury brand reported a slowdown in sales growth, it marked a reversal in the boom seen in recent years in spending for high-end products. The company is now eyeing (literally) a deal that could get it closer to entry-level shoppers to diversify away from purely luxury brands.
LVMH, the French conglomerate behind Louis Vuitton, Tiffany & Co and Dior, is buying American sunglass brand Barton Perreira to help the luxury giant expand into the mass-market, The Wall Street Journal reported Sunday.
The deal is valued at roughly $80 million, sources familiar with the matter told the outlet, and would add to the long list of brands LVMH has under its belt, including some in eyewear. It underscores the Bernard Arnault-owned company’s move to invest in brands that can reach a different breed of shoppers from the ultra-rich that its luxury brands typically cater to.
Barton Perreira was founded in 2007 by Billy Barton and Patty Pereira, both of whom had worked at eyewear company Oliver Peoples. For its part, the brand counts the likes of Sandra Bullock and Ryan Gosling among its fans, and has stores across the U.S.
The deal would aim to expand Barton Perreira beyond America and into Europe and Asia, where LVMH has a big presence through its luxury brands.
“The brand is well-known and well-established in the U.S., but we see massive opportunity to expand it,” Alessandro Zanardo, CEO of Thélios, LVMH’s eyewear division, told the WSJ. “The goal is to really dignify eyewear into the sphere of luxury.”
LVMH and Barton Perreira didn’t immediately return Fortune’s request for comment.
Eyes on eyewear
LVMH has taken an interest in eyewear for several years now. Thelios was launched as a joint venture with Italian group Marcolin in 2017, and a few years later, LVMH bought a 49% stake in the brand to fully integrate it into the luxury conglomerate’s operations. In September, it acquired Vuarnet, a luxury outdoor sunglass brand, to become part of Thélios.
“It is Thélios first brand acquisition, which marks an important milestone in the development of the LVMH eyewear company, expanding its presence in the luxury eyewear industry through this proprietary brand,” LVMH said in a statement announcing the acquisition.
Thélios has managed to double its sales in the last two years by venturing into new markets and buying licenses for the LVMH brand, WSJ reported. The moves also hint at the popularity of eyewear in recent times as consumers splurge on it. The market for eyewear is set to grow 8.5% annually between 2023 and 2030, according to ResearchAndMarkets.com.
Legacy luxury brands have looked to products like eyewear and perfumes to help reach wider audiences. For instance, luxury behemoth Kering’s Gucci acquired the perfume-maker Creed earlier this year to make inroads into the fragrance business while expanding Creed’s market in China and elsewhere.
Battling the luxury spending slump
LVMH reported a slower pace of sales growth in the third quarter—9% compared to 17% in the previous quarter. The French group, widely seen as the luxury industry’s bellwether, attributed the results to a normalization following the boom during the COVID-19 pandemic, helped by pent-up savings from lockdowns, and macroeconomic volatility.
Other luxury brands like Kering subsequently reported results pointing to a slowdown in consumer demand for luxury goods.
Despite the seeming slump, the companies seem confident about the direction of the industry. It also helps that Hermès, the maker of Birkin bags, was an outlier as it reported strong third-quarter sales ahead of analyst estimates.
“In an uncertain economic and geopolitical environment, the Group is confident in the continuation of its growth,” LVMH said in a statement announcing its earnings.
