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LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury goods company, bought the Clos des Lambrays vineyard to expand into Burgundy, adding to its holdings in Bordeaux, Champagne and the New World.
The acquisition, for which no price was disclosed, is for an 8.66 hectare (21.4 acre) vineyard which produces Clos des Lambrays Grand Cru red wine, a ranking classifying it among the top wines of Burgundy, as well as Morey-Saint-Denis Premier Cru and white wines Clos du Cailleret and Les Folatieres from Puligny-Montrachet, LVMH said in an e-mailed statement.
The purchase comes after first-quarter sales of wines and spirits at Paris-based LVMH fell 3 percent on an organic basis, partly reflecting lower Chinese demand for cognac due to a clampdown by President Xi Jinping’s government on spending on banqueting and gifts. LVMH’s founder and chief executive officer is Bernard Arnault, France’s richest person with a net worth of $34 billion, according to data compiled by Bloomberg.
“For a wine that has a sense of place and individuality, I’ve always really loved it,” said Joss Fowler, director of fine wines at London broker Fine+Rare, noting that Clos des Lambrays’ wines generally sell for a lower price than those of its neighbor Clos de Tart.
The Clos des Lambrays vineyard, in Morey-Saint-Denis in Burgundy’s Cote de Nuits region between Dijon and Beaune, traces its winemaking history back to 1365, when it was cited in the deeds of Citeaux Abbey, according to the vineyard’s website. The property was broken up during the 1789 French revolution and put back together again in 1868.
LVMH has acquired it from Ruth Freund, who bought the vineyard with her German husband, Guenter, in 1996. Her decision to sell follows his death in 2010. LVMH will retain Thierry Brouin, the estate’s chief winemaker, who has produced its past 35 vintages.
The estate makes about 35,000 bottles a year with an average retail price of 120 euros ($165) each, according to LVMH.
Fine+Rare lists the 2012 Clos des Lambrays at 1,550 pounds ($2,590) a case and the 2010 vintage at 1,453 pounds a case, according to its website. That compares with 3,186 pounds a case for the Clos de Tart 2012 and 2,845 pounds for its 2010.
Outside Burgundy, LVMH already has a stake in Chateau Cheval Blanc, one of the top four wine estates in Bordeaux’s Saint-Emilion region, according to its 2012 classification, and owns top-ranked Sauternes estate Chateau d’Yquem, a producer of sweet white wines.
LVMH also controls Champagne brands including Moet & Chandon, Dom Perignon, Veuve Clicquot Ponsardin, Krug, Ruinart and Mercier, and through its Estates & Wines division owns vineyards across the New World.
Principal holdings include Cloudy Bay in New Zealand’s Marlborough region, Cape Mentelle in the Margaret River area of Western Australia, Newton Vineyard in California’s Napa Valley, Terrazas de los Andes in Argentina and Numanthia in Spain’s Toro region, as well as Chandon sparkling-wine estates in Argentina, Brazil, California and Australia.
LVMH wine and spirits sales fell 8 percent to 888 million euros in the first quarter of this year, according to an e-mailed statement April 9. While the decline reflected pressure on cognac sales in China amid destocking by retailers, the company said Champagne had a good start to the year, with prestige vintages posting strong growth.
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