Luxury M&A: should you acquire heritage houses or technology ventures?

The question comes up in almost every discussion we have with executives and family offices: where should the next euro of external growth go? The sector's historical reflex pushes towards heritage houses, those workshops and manufactures that carry rare craftsmanship and a narrative that money alone cannot fabricate. The market, however, increasingly values technological infrastructure: client data, logistics, connected production, authentication.

Our conviction, forged through the due diligences we conduct: the right answer does not lie in opposing the two models, but in the coherence of each target with the acquirer's value chain.

Heritage: rare, expensive, but irreplaceable

A heritage house brings what no marketing plan can create: accumulated time. A body of gestures, archives, multigenerational clients. This is precisely what explains the surge in multiples: quality targets are becoming scarce, and sellers know it. Tanneries, leather workshops and independent watchmaking manufactures now trade at levels that would have seemed unreasonable a decade ago.

The real risk, however, is not the entry price. It is integration. A family house absorbed too quickly loses its key artisans, its rhythm, sometimes its soul. In our acquisition audits, the most decisive part is never the balance sheet: it is the mapping of people on whom the craft truly depends, and the robustness of the succession plan.

Technology: less prestige, more leverage

Technology targets tell a different story. A client data platform, a traceability tool or a logistics solution will never make an executive committee dream. On the other hand, it multiplies the value of the entire existing portfolio: better client knowledge, optimised inventories, online experience at boutique level.

The classic mistake is buying technology as you buy a brand, betting on the asset rather than the use case. A technology building block is only worth its speed of deployment across the group's houses. If integration takes three years, the target will be obsolete before producing its first impact.

Three questions before signing

First question: does the acquisition strengthen desirability or infrastructure? Both are legitimate, but they are not managed in the same way and are not financed at the same price. Second question: what remains of the target if its three key people leave? If the answer is 'not much', the price must factor in that risk, and the retention plan becomes the central clause of the deal.

Third question, the most uncomfortable: are you buying because the target is good, or because your competitors are buying? The top of the cycle produces defensive acquisitions that you pay for twice, at closing and then at impairment. The best deals we have supported all had one thing in common: an investment thesis written before meeting the target, not after.

Our perspective

For a group already rich in brands, the priority leans towards infrastructure: synergies there are measurable and fast. For a player building legitimacy, heritage remains the surest shortcut to credibility, provided one accepts a long payback. In both cases, price discipline makes the difference between diversification and distraction.

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