• VIKRAM ALEXEI KANSARA

LVMH’s Landmark Virgil Abloh Alliance, Explained

This week, LVMH bought a majority stake in the Off-White trademark from Virgil Abloh in a deal designed to tie the polymathic creative director to the group long-term.



There has been no shortage of palace intrigue at the world’s largest luxury company. Soon after backing Phoebe Philo’s new venture, LVMH said this week it was acquiring a majority stake in the entity through which Virgil Abloh owns Off-White’s intellectual property.


Farfetch-owned New Guards Group, which founded Off-White with the polymathic creative director in 2014, will continue to operate the hot-but-cooling haute streetwear brand through a licensing agreement, though Abloh said the deal would bring “additional firepower and scale to accelerate our momentum and evolve Off-White into a truly multi-line luxury brand.”


For LVMH, however, the alliance is likely less about Off-White and more about solidifying its link to Abloh, a rare creative talent whose contract as men’s artistic director of Louis Vuitton has an expiry date and who has surely been approached by competitors in Europe and the US.


Abloh is highly unique at LVMH and in the luxury industry at large. “I’m not a designer,” he said back in 2018 soon after his debut show for Vuitton.


Of course, Abloh was a pioneer in bringing streetwear aesthetics to the luxury market, adding an architectural edge along the way. More Hedi Slimane than Raf Simons, he may not have invented the look, though he certainly helped to popularise it.


But Abloh also reinvented the role of a creative director, injecting it with hip-hop’s penchant for sampling and remixing, skateboarding’s sense of community and a desire for social progress just as a new generation of fashion consumers were acquiring greater purchasing power and looking not just for cool-looking clothes, but something to believe in and belong to.


Critically, Abloh has always engaged directly with his followers, making them feel like upstream participants welcome in his world, not just downstream consumers of his vision. His fans didn’t flock to his drops just to shop. They came to hang out. And he offered them not just product but process: “cheat codes” and “trails of information” for how to launch brands of their own. “You can do it too” read the caption under his first Instagram post after his Vuitton debut.


The result was marketing magic: a novel approach to luxury branding that was more open-source than ivory tower, no matter the high price points.


“Ask a kid on the street, the face of the future, about Louis Vuitton, and I guarantee they think of Virgil first,” said Highsnobiety co-founder Jeff Carvalho. “He has changed the rules of how you market product forever. For LVMH, he’s lightning in a bottle.”


Abloh is also a cross-generational figure who understands the youth, but can work with the likes of Louis Vuitton chief Michael Burke, who has called Abloh the Karl Lagerfeld of his time, a multi-tasking creative genius with business savvy and almost superhuman energy.


It’s no surprise LVMH wanted to keep Abloh close beyond his current Vuitton contract. And the group seems to have spotted an opportunity: when New Guards Group sold to Farfetch for $675 million in 2019, Abloh did not see a return, despite having co-founded its most successful brand.


Now, LVMH appears to have found a way to offer Abloh an overdue payday, while tying him to the group long-term, using more or less the same mechanism it used to attract and retain top talents like John Galliano, Marc Jacobs and Jonathan Anderson, each of whom effectively got financial support for their own brands in exchange for longtime service at one of the group’s heritage houses: Galliano at Dior, Jacobs at Vuitton and Anderson at Loewe.


But without a suitable vacancy at a major LVMH brand, it seems Abloh will have another, more horizontal mission, at least for now: “leverage together the group’s expertise to launch new brands and partner with existing ones in a variety of sectors beyond the realm of fashion.”


Abloh has certainly proven that he can bring significant buzz to brands across a wide range of categories, having worked with everyone from Nike and Ikea to Evian and Rimowa, and can surely help to re-energise some of the group’s more stagnant brands, perhaps taking advantage of his rare horizontal role to break down silos and cross-pollinate the portfolio. His background as a DJ on the nightlife circuit could also come in handy with some of the spirits labels.


Launching new brands may be a more difficult task. LVMH has a poor track record with start-ups and it remains to be seen whether the conglomerate can successfully build its own equivalent to New Guards Group. But if anyone can help them do it, it’s Abloh. Not only does he have a strong instinct for making brands sticky. He also has an unparalleled network of next-generation creators and a community full of aspirants, giving the group a de facto talent pipeline.


Of course, Off-White’s agreement with New Guards Group runs through 2035 but can be renegotiated or terminated in 2026, at which point LVMH may choose to take on the operation of the label, too, embedding it at the core of the brand accelerator that Abloh seems set to build.









https://www.businessoffashion.com/briefings/luxury/lvmhs-landmark-virgil-abloh-alliance-explained?from=2021-07-22&to=2021-07-23