The day has finally come for luxury style to meet Gangnam style.
Earlier this week, global luxury goods conglomerate LVMH (Louis Vutton x Moët Hennessy) announced that it will invest up to $80 million in YG Entertainment, the South Korean talent agency that represents K-Pop mega-acts like 2NE1, BIGBANG, and Psy.
According to Reuters, the deal is one of the biggest investments by a multinational corporation in the Korean pop culture wave known as hallyu, which is comprised of music, TV programs, and consumer products like cosmetics. But now, YG is hoping to take advantage of K-Pop’s global momentum by expanding into clothing with the help of LVMH.
"I expect the investment would enable YG to enter the fashion industry,” said Hong Jung-pyo, an analyst at Kiwoom Securities. “YG will be able to leverage its performers to expose and market fashion products.”
LVMH's private equity branch L. Capital Asia is set to purchase $60 million in new preferred shares of YG, becoming the company’s second-largest shareholder. It’s a pretty hefty investment, but the luxury goods giant isn’t going into this completely blind. In 2009, LVMH-owned Louis Vuitton became the first luxury brand to sponsor a K-Pop singer when it partnered up with BIGBANG member G-Dragon for the release of his solo album.