Torre Vella in Menorca is one of the properties owned by Les Domaines de Fontenille. — lesdomainesdefontenille.com
The LVMH conglomerate is betting on a small but high-end French hotel group with properties in tourist hot spots like Tuscany in Italy and Minorca in the Mediterranean Sea for its latest expansion in the world of luxury travel.
LVMH Moët Hennessy Louis Vuitton has bought a stake of about 20% in Les Domaines de Fontenille, according to a person familiar with the transaction who declined to provide the entity’s value. While LVMH and Les Domaines de Fontenille announced the investment in a statement, they declined to comment on the stake size.
Anais Ventures, the Geneva, Switzerland-based investment company of the Firmenich family, also took a minority stake in the business, according to the statement.
After the deal, LVMH will be the biggest shareholder in the hotel chain, said Frederic Biousse, one of Fontenille’s two co-founders, in an interview. The hotel chain, founded in 2016 by Biousse and Guillaume Foucher, has 12 properties in France, Italy and Spain.
The purchase reflects LVMH’s growing interest in the so-called experiential luxury arena, providing it with a way to diversify from the high-end goods sector that has been hit hard by falling demand – especially in China. Consumers have been less willing to buy the group’s pricey Louis Vuitton and Christian Dior items like bags and jackets. LVMH shares are on track for their worst yearly performance since 2008.
The company already owns Belmond, the chain behind The Cadogan hotel in London and the luxury train service Venice Simplon Orient-Express. The Cheval Blanc hotel chain is also part of the group that’s controlled by Bernard Arnault, Europe’s richest man.
Fontenille attracts a young and loyal clientele that’s willing to spend between €400 (RM1,874) and €1,000 (RM4,686) a night during the high season, chief executive officer Linda Hazi said.
Biousse said his group is seeking to remain in that price range, even after France’s most exclusive hotels known as “palaces” raised their per-night rates in the past four years to €1,500 (RM7,026) or more.
Fontenille typically targets properties with a strong heritage such as the one in Provence, France which boasts 40ha of organic vineyards, or the former chateau of actress Catherine Deneuve, known as Domaine de Primard, less than an hour’s drive from Paris.
The new investment will enable the group to expand in Italy and Spain, Hazi said, adding that it may do some syndication deals with other partners when buying exceptional properties, particularly in Italy.
Unlike many hospitality groups that manage but don’t own the properties, Fontenille seeks in most cases to be the landlord as well, Biousse said. The new cash will also help target bigger properties, Hazi said. – Bloomberg
