Page 48 - Forbes - Asia (December 2019 - January 2020)

Arnault frequently In 1984, when he learned that
visits this Louis Vuitton Christian Dior was for sale, he
location next door to
his Paris offices. pounced. Its parent, a textile and
disposable-diaper company called
Boussac, had gone bankrupt, and the French government was
looking for a buyer. Arnault put up $15 million of his family’s
money. Lazard supplied the rest of the $80 million purchase
price. At the time, according to reports, he pledged to revive
operations and preserve jobs, but instead fired 9,000 workers
and pocketed $500 million, selling most of the business. Crit-
ics recoiled at his brazenness, which seemed more American
than French. The media later dubbed Arnault “the wolf in the
cashmere coat.”
Arnault’s next prey was Dior’s perfume division, which
had been sold to Louis Vuitton Moët Hennessy. A fight be-
tween the company’s brand heads gave him an opening. First,
he teamed up with the boss of Vuitton, the leather-goods
company whose founder made custom trunks for Empress
Eugénie, wife of Napoleon III. Arnault helped the head of
Vuitton oust Moët’s chief, only to get rid of him, too. By 1990,
again backed by Lazard and using the cash from Boussac, he
had taken control of the company, which included Moët &
Chandon, the famous French champagne maker, and Hen-
nessy, the French cognac producer that dates to 1765.
After conquering Louis Vuitton Moët Hennessy, Arnault
spent billions to acquire leading European companies in
fashion, fragrance, jewelry and watches, and fine wines and

And at 70, Arnault is far from done. In late November,
he sealed the biggest-ever deal in the luxury sector, when FASHION CIRCLES
182-year-old American jeweler Tiffany & Co. agreed to LVMH DIVIDES ITS 79 BRANDS INTO FIVE GROUPS. HIGHLIGHTED
accept LVMH’s unsolicited takeover offer in a transaction BELOW IS THE BIGGEST BUSINESS WITHIN EACH.
valued at $16.2 billion. “If you compare us to Microsoft, [we
are] small,” he says. Indeed, LVMH’s market value of $227 CHRISTIAN DIOR
billion lags far behind the software giant’s $1.2 trillion. “It’s $3.2 BIL
BULGARI
just the beginning,” says Arnault.
Perfume & $3 BIL
cosmetics
rnault’s beginnings in France’s industrial north were far 13% Watches &
jewelry
removed from the glittering perch he now occupies.
AHis first love was music, but he didn’t have the tal- 9%
ent to make it as a concert pianist. Instead, after graduating
from an elite French engineering school in 1971, he joined SEPHORA
his father at the construction firm founded by his grand- LOUIS VUITTON TOTAL REVENUE $10.3 BIL
$12.4 BIL
father in the city of Roubaix. $54 BIL
An exchange with a New York cab driver that year
planted a seed that would grow into LVMH. Arnault asked
Selective
the cabbie if he knew of France’s president, Georges Pompi- retailing
dou. “No,” replied the driver, “but I know Christian Dior.” & other
At age 25, Arnault took charge of the family business. After Fashion & leather Wine & 28%
socialist François Mitterrand became France’s president in 39% spirits
1981, Arnault moved to the U.S. and tried to build a division 11% JAMEL TOPPIN FOR FORBES
there. But his ambitions were bigger than construction. He HENNESSEY
$3 BIL
wanted an enterprise he could scale, a business with French
SOURCES: LVMH; LUCA SOLCA, BERNSTEIN.
roots and international reach.

46 | FORBES ASIA DECEMBER 2019 / JANUARY 2020