LVMH shares up on Loro Piana cashmere brand purchase

LVMH shop front
Image caption LVMH plans to expand Loro Piana's leather goods offering

Shares in LVMH have risen by more than 2% after it bought 80% of Italian luxury cashmere clothing brand Loro Piana for 2bn euros ($2.57bn; £1.7bn).

The deal values the family-owned company at 2.7bn euros.

It started as a wool mill in 1924 and is the largest Western manufacturer of cashmere, LVMH said.

The deal comes two years after LVMH bought jeweller Bulgari, and a decade after it acquired leather goods maker Fendi and fashion label Emilio Pucci.

"The price is steep, but it is a fairly unique business," said Paul Swinand, analyst at market researcher Morningstar.

Loro Piana makes 30% of its sales in Asia and has enjoyed continued strong demand in China.

It expects sales to grow by about 10% this year, after growth of 13.1% to 630m euros in 2012.

LVMH said that, as well as seeking a wider global presence for Loro Piana, it also planned to expand the Italian brand's leather goods offering.

In late morning trade in Paris, shares in LVMH were up by 2.14% at 131.50 euros.

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