LVMH Moët Hennessy Louis Vuitton, the world’s largest luxury goods company, will develop resorts using the name of its Bordeaux winery, Cheval Blanc. The company’s first location, the Michelin-starred French ski resort, Courchevel opened in 2006. Two more hotels are scheduled to join the new chain by 2012 in Oman and Egypt under the newly formed LVMH Hotel Management.
LVMH intends to tread lightly to limit its exposure to the risks of the often turbulent hotel industry. LVMH will run the resorts under management contract, but will not own the property, and Egypt’s Orascom Development Holding AG will front most of the costs of the Oman and Egypt locations. The Sultanate of Oman would finance an estimated 30 percent and Orascom will assume the remaining 70 percent. LVMH’s hotels will be touch points and sales outlets for many of the company’s brands. For instance, the Cheval Blanc in Courchevel has a Givenchy spa, and visitors can buy its Louis Vuitton and Dior merchandise in the hotel. Read more. (WSJ)