Burberry is one of the few independent luxury brands in the world, and it also happens to be one of the most successful. After years of struggling to take back its plaid from British chav culture, CEO Angela Ahrendts and creative director Christopher Bailey have molded Burberry into a label of which everyone wants a piece.
Now, it seems that someone is looking to scoop up the whole thing. Reuters reports a rumor that an undisclosed bidder wants to buy the brand for nearly $10 billion. (It's current value on the stock market is around $8 billion.)
If it's true, who could it be?
LVMH or PPR? Probably not. Burberry is expensive, and while there's always room for growth, there's not that much room to make it worthwhile for one of the big conglomerates.
- Richemont? Possibly. Richemont is different because its weakness is soft luxury--aka handbags, shoes, and clothing. Burberry would finally put the Swiss conglomerate on par with PPR and LVMH.
- Private equity firm? Doesn't make sense. Burberry is too mature. They're not going to be able to flip it for $20 billion. At least not at any time soon.
- Chinese billionaire looking for a trophy brand? This seems to be the most likely answer. "The only bidder I can see paying this kind of multiple is a Chinese (company) looking for a trophy asset," said one trader to Reuters.
Regardless of whether or not anything actually happens, this speculation has been very good for Burberry's stock. Shares have already risen by more than 4% today.