Is LVMH ditching Tiffany because it has spotted a more attractive brand? It is either playing hardball over price or wants to scrap the deal altogether since the pandemic makes its offer look far too generous. A merger with Richemont in particular would help LVMH to expand its watches and jewelry division, which generated just 8% of group sales in 2019. Valuations in the luxury sector are stubbornly high despite the pandemic. As a multiple of next year’s earnings, European luxury stocks trade at a 93% premium to the MSCI Europe index compared with 62% in the fourth quarter of last year, UBS analysis shows.

Source: Wall Street Journal September 16, 2020 15:57 UTC