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What to Make of the Rumors Around Ralph Lauren and LVMH

Ralph Lauren shares popped Tuesday after Axios Pro reported on the American fashion firm’s recent exploratory talks with LVMH.

Though a Ralph Lauren spokesperson declined to “comment on rumor or speculation,” and LVMH didn’t respond to a request for comment, the French giant hasn’t been shy about its interest in expanding a luxury empire that paid $15.8 billion for Tiffany & Co. less than two years ago.

Ralph Lauren’s shares have rebounded to their 2019-era trading level in the $131 range after dropping to about $60 in the pandemic’s early days. Speculation bubbled up in the first months of 2021 that companies, especially Gucci owner Kering, were mulling a deal for the New York heritage fashion firm. Kering CEO François-Henri Pinault has repeatedly voiced his interest in using the company’s healthy balance sheet to pull the trigger on an acquisition that makes sense.

Both Ralph Lauren, the rare American fashion name with considerable cachet, and Coach and Kate Spade parent Tapestry Inc. have been the subject of acquisition chatter in recent years.

One investment banker told Sourcing Journal that almost every company is on sale, provided the potential seller gets its asking price.

But is designer Ralph Lauren, who remains the company’s chairman and chief creative officer, ready to sell? So far, it seems like the answer is no. Hiring former Procter & Gamble executive Patrice Louvet in May 2017 as president and CEO has fueled the company’s digital-first, millennial- and Gen-Z-friendly makeover.

The strategy seems to be working, as net income rose 82 percent to $217.7 million on revenues up 27 percent to $1.82 billion in Q3, while digital sales improved more than 40 percent.