What's going on?

Looks like LVMH might be getting cold feet: the luxury conglomerate is trying to renegotiate its acquisition of US jeweler Tiffany & Co.

What does this mean?

The French luxury giant agreed to buy Tiffany�s for $16 billion back in November � a deal that would both expand LVMH�s presence in the US and bolster its offerings in the fast-growing jewelry market. But when LVMH�s boss said at the time that Tiffany�s would �thrive for centuries to come�, he probably wasn�t expecting a once-in-a-blue-moon pandemic and historic riots to knock the luxury sector off its perch.

That slump�s punished luxury companies� stock prices � not least Tiffany�s, which has been trading at 10-20% below LVMH�s offer price since March. That means LVMH could buy up Tiffany�s shares on the stock market instead, and end up acquiring the company for less than the $16 billion it�d offered. But it�s said it doesn’t want to, and is now just trying to get Tiffany�s to agree to a lower price.

Why should I care?

For markets: Raw deal.
The pandemic�s forced several other companies to renegotiate or walk away from deals too. Just last month private equity firm Sycamore Partners called off a $500-million�agreement�to take full control of Victoria�s Secret from its owner L Brands. And judging by how much �deal spreads� have widened recently � that is, the difference between the price at which a company agrees to buy an acquiree�s shares and the current price of those shares � investors seem to be expecting plenty more deals to collapse yet.

The bigger picture: Big deal.
Luxury goods are nice and all, but the US has bigger fish to fry. Data out on Thursday showed a higher-than-expected two million Americans filed for unemployment benefits last week, bringing the total to a massive 43 million since March. That�s even more than in the 18 months after the global financial crisis.