This twist that has caught many by surprise within the fashion sector is the recent sale by LVMH of the Off-White label to Bluestar Alliance. This particular purchase has raised questions about the future trajectories of both LVMH and Off-White and changed the big luxury-streetwear equation.

Off-White has been on the frontier of luxury-streetwear ever since the brand was created by Virgil Abloh. The combination of luxury and urban trend touch was well received in the market by trendy inclined consumers and celebrities that became a fan of the brand almost instantaneously. Off-white found rapid growth when it was bought by LVMH and was able to establish itself as one of the most popular brands in the market.

Nevertheless, current and new market pressures and the emerging client needs have compelled a rethink in the composition of the LVMH brand portfolio. This is particularly so when one considers the fact that Off-White’s decision to sell itself to Bluestar Alliance is a brand management company whose main specialty is to take fashion brands and reinstate them to their Glory.

For LVMH, the sale is beneficial since it frees the luxury giant to concentrate on its strategic luxury businesses. The decision is regarded within a wider context of shifting focus on consolidated and better aligned with LVMH strategy luxury brands. Some industry analysts believe that this divestment is also due to decline in the luxury-streetwear market that has become somewhat of a saturated market in recent years.

Bluestar Alliance, in turn, views the Off-White’s acquisition as a shot at extending its wholesale distribution business in the premium fashion segment. The manufacturer already operating with numerous diversified brands such as Tahari and Bebe considered Off-White as a strategic business unit that can be grown and expanded. The company saw that through outsourcing brand management and distribution to Bluestar, Off-White will benefit from fresh revenue streams amidst fresh and unrecognized markets and product categories.

Thus, the reaction of the fashion community was mostly ranged between disbelief and interest. Everyone wants to see how Off-White will change, especially since the brand was so closely linked to Virgil Abloh’s vision. That is why there are concerns if Off-White can remain culturally appropriate or retain the design spirit that its founder has once established and with LVMH’s support.

Some market players have noted that this deal shows the problems that luxury-streetwear brands have to face in order to sustain their growth and the desirability of the offerings. This sort of bridges the luxury and the street and as such the brands in this segment are under pressure to come up with new models of communicating with the customers.

The sale also bring into question more streetwear influenced brands within luxury groups as well. There are people that consider that this could be the first sign of a trend shift, and that other luxury groups might be reviewing their investments within the so-called streetwear-oriented brands.

Pricing aspects of the transaction have not been declared, but experts estimate that Off-White is highly probable to be valued significantly higher than its current market value given its brand consciousness and recognition around the world. The transaction is contingent on market practices closing conditions and requisite approvals of the authorities.

With the change of ownership of Off-White at the demise of the current owner and the arising of the new owner of Bluestar Alliance, it will remain to be seen how Bluestar Alliance is going to overcome those challenges while at the same time making the most out of the existing opportunities available within the company. It is perhaps in the same tone when the company mentioned it wanted to respect Off-White’s culture while seeking ways to expand. This may include venturing into new product sub-segments, increasing the brand’s online outreach and pushing the envelop on partnership initiatives.

Everyone particularly in the fashion industry will keenly anticipate the changes that are going to happen to Off-White now that it is owned by Bluestar Alliance. The outcome of this shift could have significant impact on the luxury-streetwear segment; its result may determine the manner and approach other brands and conglomerates will consider when making such a move in the future.