Page 62 - Forbes - USA (November 2019)

modernity. . . . It’s like fire and water.”
That paradox has translated into record sales
and profits at LVMH, whose roster of more than FASHION CIRCLES

70 brands includes Fendi, Bulgari, Dom Péri- LVMH DIVIDES ITS 79 BRANDS INTO FIVE GROUPS. HIGHLIGHTED
gnon and Givenchy. That, in turn, has helped BELOW IS THE BIGGEST BUSINESS WITHIN EACH.
drive up LVMH’s stock price, which has nearly
tripled in less than four years. Arnault, who owns
47% of the company’s shares with his family, is
CHRISTIAN DIOR
58 now worth $102 billion, $68 billion more than $3.2 BIL
he was in 2016. He is the third-richest person on BULGARI
earth, just behind Jeff Bezos ($110 billion) and $3 BIL

L T Bill Gates ($106 billion). PERFUME & COSMETICS
U
A And at 70, Arnault is far from done. In late 13% WATCHES & JEWELRY
N October, LVMH made an unsolicited $14.5
R
A billion bid for the 182-year-old Ameri- 9%

D can jeweler Tiffany. If the deal goes

R
A through, it will be Arnault’s biggest
N acquisition ever. “If you compare SEPHORA
R $10.3 BIL
E us to Microsoft, [we are] small,” he
B LOUIS VUITTON TOTAL REVENUE
says. Indeed, LVMH’s market value
— $12.4 BIL
$54 BIL
E of $214 billion lags far behind the
L
I software giant’s $1.1 trillion. “It’s just
F
O the beginning,” says Arnault.
R
P rnault’s beginnings in SELECTIVE
A France’s industrial north FASHION & LEATHER RETAILING
& OTHER
were far removed from the
glittering perch he now oc- 39% WINE & SPIRITS

cupies. His first love was mu- 28%
sic, but he didn’t have the talent to make it as a 11%
concert pianist. Instead, after graduating from HENNESSEY
an elite French engineering school in 1971, he $3 BIL
joined his father at the construction firm found-

SOURCES: LVMH; LUCA SOLCA, BERNSTEIN.
ed by his grandfather in the city of Roubaix.
An exchange with a New York cab driver that
same year planted a seed that would grow into genteel French. The media later dubbed Arnault
LVMH. Arnault asked the cabbie if he knew of “the wolf in the cashmere coat.”
France’s president, Georges Pompidou. “No,” re- Arnault’s next prey was Dior’s perfume di-
plied the driver, “but I know Christian Dior.” vision, which had been sold to Louis Vuitton
At age 25, Arnault took charge of the family Moët Hennessy, and a fight between the compa-

business. After socialist François Mitterrand be- ny’s brand heads gave him an opening. First, he
came France’s president in 1981, Arnault moved teamed up with the boss of Vuitton, the leather-
to the States and tried to build a division there. goods company whose founder had made cus-
But his ambitions were bigger than construction. tom trunks for Empress Eugénie, the wife of Na-
He wanted an enterprise he could scale, a busi- poleon III. Arnault helped the head of Vuitton
ness with French roots and international reach. oust Moët’s chief, only to get rid of him, too. By
In 1984, when he learned that Christian Dior 1990, again backed by Lazard and using the cash
was for sale, he pounced. Its parent, a textile and from Boussac, he had taken control of the com-
disposable-diaper company called Boussac, had pany, which included Moët & Chandon, the fa-
gone bankrupt, and the French government was mous French champagne maker, and Hennessy,
looking for a buyer. Arnault put up $15 million of the French cognac producer that dates to 1765.
his family’s money, and Lazard supplied the rest After conquering Louis Vuitton Moët Hen-
of the $80 million purchase price. At the time, nessy, Arnault spent billions to acquire lead-
according to reports, he made a pledge to revive ing European companies in fashion, fragrance,

operations and preserve jobs, but instead he fired jewelry and watches, and fine wines and spirits.

9,000 workers and pocketed $500 million, sell- Since 2008, LVMH has purchased 20, bringing

ing off most of the business. Critics recoiled at his the total to 79 brands. In 2011 it paid nearly $5
brazenness, which seemed more American than billion for the Italian jeweler Bulgari in a most-

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