There are still risks. Running restaurants, hotels and health spas is very different to selling shoes and handbags. For hotels, it requires a distinctive aesthetic, not to mention pockets deep enough to ride out the current travel slump. Even before the pandemic, a bad stay, meal or skin peel risked alienating those who would buy clothing and jewelry. Now any brand offering services faces the additional peril of its premises becoming a source of infection.
No wonder LVMH has appointed an experienced executive to lead its charge. Andrea Guerra, formerly of Eataly and Ray-Ban maker EssilorLuxottica SA, will soon take up the role of chief executive of LVMH Hospitality Excellence. Partnerships with restaurants, hotel operators or high-end fitness chains are another option. For example, Marriott International Inc. operates the Bulgari hotels.
Either way, expanding into new categories amid the worst luxury downturn in modern history is not for the fainthearted. But the biggest players take a long-term view. Offering extravagant experiences is one area where this approach could pay off.
This article was provided by Bloomberg News.