A Tiffany deal “would potentially double the size and profitability” of LVMH’s hard luxury business, analysts at investment firm Jefferies wrote in a note to clients. Sales of those items would reach nearly €9 billion.

LVMH may also be chipping away at Richemont’s position already. LVMH’s 2011 purchase of Bulgari has worked well for it. “While there are no numbers available, the widely held impression is that Bulgari has gained market share against Cartier in the past few years,” Luca Solca, luxury analyst at Bernstein, said in a note (paywall).

Though Tiffany’s sales have lately slumped as fewer tourists have been spending at its stores in places such as the US and Hong Kong, the historic brand is an attractive target for LVMH. Growth in the luxury sector as a whole has slowed in the past few years and companies such as LVMH looking to expand through acquisitions have few independent targets to choose from these days, especially in hard luxury.

LVMH’s size and resources could be harnessed to quickly expand Tiffany’s sales in regions such as Asia while improving the conglomerate’s overall profitability. It would make LVMH even stronger, though the deal isn’t done yet.

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