Louis Vuitton, the world's largest luxury brand, has announced that it will be investing up to $80 million into YG Entertainment, the South Korean company that boasts the most impressive lineup of K-Pop performers.
This might come as a surprise to those who don't immediately think of fashionable clothing when they think of Korean music videos, but Vuitton and its equity branch LVMH is onto something here. The K-Pop genre has incredible influence in Korea and nearby neighboring countries such as Japan, so product placement has the potential to go a long way. YG represents stars such as Psy, Big Bang and 2NE1, not to mention a list of high profile actors and actresses as well. It's an optimal opportunity to boost the company's image in the region.
Of course, YG isn't a bad investment for anyone who simply wants to make some money off the stock market. The market value for the company is $690 million as it stands and the potential for growth in markets such as the United States is huge. We're not analysts but LVMH seems to agree with us.
The company will invest $60 million up front, which gets them 1.35 million shares, and Louis Vuitton may acquire another $20 million worth of shares from YG's founder, Yang Hyun-suk. If the latter occurs, Vuitton will be the second largest shareholder, behind only Yang.
YG has recently shown interest in entering markets outside of entertainment, such as fashion and cosmetics. The company announced it would partner with South Korea's Samsung company to create an apparel line called Nona9on...don't be surprised if it tries to milk its new partnership with Louis Vuitton for similar purposes.
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