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Automatic TRANSCRIPT

Bloomberg Dot Com tiffany shares surging the most on record more than thirty percent the heels of this bid by Louis Vitton parent company for fourteen and a half billion dollars the question is who are the other potential suitors that step up to buy tiffany or is it just going to be on. LVMH to raise their bid. Kim Scene is joining us now he's a Bloomberg News. US luxury quarter I want to start with the price tag what is the implied path forward by the premium that we're seeing baked into tiffany shares currently at one thirty dollars plus versus the one twenty dollars share price that the fourteen and a half billion dollar price tag would imply right so it's a fourteen and a half billion dollar proposal from Lvmh's that's one twentieth share and some analysts are speculating they might have to go up to as much as one sixty and They're also speculating that tiffany could attract bids for other suitors now so there's companies that have been mentioned our reach mall which owns cartier and carrying which is Elvis inches biggest fashion rival that owns it owns brands like Gucci and Saint Laurent so Kim what's the strategy for Lvmh and perhaps other suitors to you go after Tiffany what are they looking for tiffany makes a lot of sense for LVMH because it fills a pretty big gap in its portfolio Of course has numerous very strong European fashion labels like Louis Vuitton Dior Celine Fendi in jewelry it owns Ghauri which is much more high end than tiffany but tiffany would be a way into the US jewelry market and American shoppers jewelry particularly branded jewelry has been performing particularly well in London three lately and it's a relatively small segment of LVMH compared with fashion and leather goods. Can I talk about the timing why now I'm not sure why now but the tiffany has been on the rebound in recent years so CEO Allesandro Bolillo has been very busy he's overhauled tiffany's marketing you hoping hoping to attract younger shoppers he entered into India after reaching what they called a critical mass of demand to warrant moving in there it vowed to make it's more supply its supply chain more transparent and hired thousands of new diamond industry workers and executives right now are super focused on growing the business in China in because by opening their own stores they are rather than waiting for tourists that come abroad you avoid the volunteer volatility of tourist flows so let's talk about the luxury market and China China has been an Asian general has been a big driver of growth in luxury over the last ten plus years is but so the trade uncertainty here can't be good for luxury so what are some of the company you cover what what are you what are they saying about trade wars and luxury well let's that Vinnie which is an interesting situation they make their jewelry here in the US so they do everything backwards the the big luxury companies the American ones so let's take tapestry which owns coach and Kate Spade and Stuart Weitzman they used to make a lot of goods in China fifteen years ago but they've spent the last decade or so diversifying their supply chain so in in coaches case fewer less than five percent of their goods are made in China now because they've moved to places like Vietnam and the Philippines India and this is what we're seeing across the industry I'm looking right now the LVMH is shares in Paris and they're up just slightly or basically flat I that's really interesting basically people saying this is a good move yeah I think that is people saying it is it is a good move because it does fill that fill that gap tiffany's basically flat in the US now it used to be a more brand used to be stodgy like people didn't it was less relevant to two young shoppers which are so so able but these moves lately seem to have to have worked I'm just wondering about sort of whether this will also diversify tiffany outside right if the US much more because of LVMH's footprint the push in recent over the past year or so has been to physically the go-to where the shoppers are and not rely so much on on tourists going abroad to Paris or London or New York where their biggest story is spending two hundred fifty million dollars to renovate their flagship store they're currently they're about to move next door the whole selling floor next door to their to their old place so they can they can spend all this all the time and money because that is the their their crown Jewell of of their business like as much as ten percent of their global business comes from this one store in New York on Fifth Avenue Avenue Okay Kimba thanks for joining us Kim machine is a luxury reporter for Bloomberg News covering all things luxury.