The gilded cage of commerce that enshrines the luxury goods industry is a bonfire of decadence and determination. The business of furnishing la bonne vie is a study in synchronised perfection, wherein everyone, from creative directors to artisans, must contribute flawlessly to the accoutrements of living in order to engineer the dream of luxury.
Among the global cast of characters and corporations that seem to revel in the US$200 billion marriage between creative geniuses and corporate titans, the Great Gatsby of the brand-name trade is Bernard Arnault, Christian Dior S.A. Chairman and LVMH Chairman and CEO.
As commander-in-chief of the LVMH empire since 1989, Arnault has orchestrated the conglomerate's ascension to dominance through a series of virtuosic corporate takeovers, as well as inspired collaborations with some of fashion's most iconic enfants terribles. As maestro at the helm of over 60 of the world's most prestigious brands, Arnault continues to compose the symphony of successful living to which many aspire.
The story of Arnault's valiant rise to fashion aristocracy has been bestowed with mythological reverence from corporate analysts, admirers and rivals alike. After graduating from École Polytechnique with a degree in engineering, Arnault quickly took the throne of his father's property and construction firm before diversifying into the American property market. By the mid-1980s, Arnault had returned from his sojourn in America and had begun to devote his efforts to acquiring businesses that would leverage him into the luxury retail sector.
It was at this point that he was prevailed upon by the French government to invest in Boussac, a textile consortium of various démodé companies including Paris department store Le Bon Marché and the respected, yet relatively lackluster at the time, fashion house of Christian Dior.
It was to be an acquisition that would cement the legacies of both Dior and Arnault, as the latter sold nearly all of Boussac's assets (with the exception of Le Bon Marché and Dior) to finance a sizeable investment in the newly formed luxury conglomerate, LVMH. Then, with Machiavellian prowess and astute economic timing, Arnault became LVMH's Chairman of the board, and by 1989, Arnault had become the main shareholder in and CEO of LVMH, a veritable branding superpower.
Over the ensuing two and a half decades, Arnault focused on expanding the portfolio of brands in LVMH's possession, acquiring names such as Fendi, Berluti, Guerlain, Donna Karan, Marc Jacobs and, most recently, Bulgari. Furthermore, Arnault implemented an enduring company program of diversification, investing in retailers such as Sephora; media outlets including Les Echos (a French financial newspaper) and NOWNESS; and other miscellaneous pursuits such as Princess Yachts International and Heng Long International (a crocodile skin and leather supplier).
Walter Loeb, the Forbes contributor behind the "Loeb Retail Letter" and President of management consultancy and strategic advisory firm Loeb Associates Inc., believes Arnault's "hands-on merchant" leadership style is key to his success. As Mr Loeb informed me, "His acquisitions of famous brands have been brilliant and consistent. He makes sure that new acquisitions fit in the scope of LVMH." But with such a large market share of the luxury goods industry already secured, what does Mr Loeb believe is on the horizon for LVMH? "I think there is a drive to improve the brands and make them unique. I also believe that he will invest in the Internet."
The cornerstone of Arnault's corporate strategy was perhaps best described by the man himself in conversation with TIME Magazine in 2000 when he asserted, "We look for hot companies, still small. No one can do as much with a hot brand as we can." This "hot and small" approach has earned Arnault a reputation as fashion's "wolf in cashmere," quietly amassing distinguished, family-owned (but often financially strained) ateliers much to the chagrin of competitors and sometimes even the family itself.
However, his aim is not to homogenise his acquisitions but, rather, to benevolently refine the branding, modulate the distribution of licensing and, ultimately, increase the prestige of the product. LVMH might effectively be considered a commonwealth of sovereign brands, each with their own distinct heritage and creative style that is promoted more effectively under the relative corporate security of the LVMH umbrella.
Designers such as Marc Jacobs, John Galliano and most recently Maxime Simoëns have benefited immeasurably from their alliances with LVMH, managing to alleviate the financial burdens of their eponymous brands whilst still enjoying creative freedom.
However, some have refused to acquiesce to the empire. Hermès has been engaged in defensive posturing in the wake of LVMH's 22.3% investment in the storied-brand in 2010, and Gucci famously (and controversially) eluded the grasp of Arnault in 1999, instead allying itself with PPR, igniting one of France's most heated and enduring corporate rivalries.
Central to Arnault's branding munition is his ability to harmoniously integrate and socially ingratiate some of fashion's most volatile and controversial creative minds. Arnault's prodigious skill for pairing heritage-laden houses with rebellious, firestorm designers consistently results in fashion par excellence.
It was Arnault who coupled Alexander McQueen with Givenchy, John Galliano with Dior, Phoebe Philo with Céline and enlisted Marc Jacobs for Louis Vuitton. And like all great impresarios, Arnault knows how to "manage" his talent. Speaking to the Wall Street Journal in 2009, Arnault explained, "Designers are closer to artists than to engineers. They're not like normal managers, and you have to balance their creativity and rationality. John, Karl, Marc, they're genius. You can't put them into a rational environment."
Nonetheless, as the chief gatekeeper of the sector most defined by excess, Arnault is charged with the responsibility of providing a rational anchor to an otherwise ephemeral industry. LVMH's philanthropic portfolio encompasses programs in the fields of medical and scientific research, education, environmental sustainability and cultural preservation. The corporation is the patron of numerous charities and social projects developed to encourage the realisation of creative potential and corporate success in forgotten communities.
One such initiative aims to foster talent in young musical virtuosos through the loan of LVMH-owned Stradivarius instruments. But the most elaborate and ambitious illustration of Arnault's devotion to the arts is still under construction. The Louis Vuitton Foundation for Creation, dubbed "The Cloud" after its behemoth glass design, is due for completion at the end of 2013. The US$200 million, 12,000 sq.m. museum designed by famed architect Frank Gehry, will house Bernard Arnault's extensive collection of contemporary art and play host to a rotating roster of international artists and exhibitions. Situated in the Jardin d'Acclimation at the centre of the Bois de Boulogne, Arnault's cultural pièce de résistance is designed to reflect the changing hues of a Parisian day, in much the same way as Arnault has done for most of his career.
Frank Gehry with The Louis Vuitton Foundation
For over a quarter of a century, Bernard Arnault has defined the ideal of success. Trained as a classical pianist in his youth, Arnault has established a venerable corporate career conducting the LVMH empire through the concerto of the luxury goods industry. His refined, debonair public image belies a tenacious, erudite corporate titan who is equally encouraging and exacting on the creative drive for perfection. Despite his obsessive eye for detail and infinite store of corporate ambition, his soft-spoken, serene fortitude personifies the elegance synonymous with the luxury ideals he promotes. As Marc Jacobs told the Wall Street Journal earlier this month, "...working for Mr Arnault is like working for the farmer in the movie 'Babe.' I mean he's never going to jump up and down with exuberance, and the most he can say has often been the equivalent of 'That'll do pig.'"
Within the aristocratic society of the luxury goods industry where artistry and genius are de rigueur, Bernard Arnault stands alone as the architect of opulence, defining the sartorial and lifestyle utopias which many strive to reach. For, as Arnault told TIME Magazine in 2001, "It is necessary to make people dream. A woman identifies with a lofty ideal more than with a normal person."
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