a Story Bernard Arnault I would like to tell you about my meeting with the late Steve Jobs, co-founder of Apple and creator of the iPhone. Jobs was on the verge of launching the Apple Store. Arnault is a French company, LVMHOffering Louis Vuitton luggage, Christian Dior couture, Tiffany jewelry and Dom Pérignon champagne to high society .As they spoke, the conversation turned to their product. Arnault asked his Jobs if he thought the iPhone would still exist 30 years after he did. He replied that Americans did not know. Jobs then asked the same question about Dom Pérignon, whose first vintage was 1921. According to the story, Mr. Arnaud assured him that it would still be drunk for generations.
In many ways, Arnault was the first European to reach the top of the world’s richest list and epitomizes the way business is done in the Old Continent. As his remarks to Jobs suggest, he’s thinking not just about next year’s profits, but about the distant past and decades into the future. While he enjoys craftsmanship and champions his master quirky designers, perfumers and sellers, he often makes the final decisions himself when it comes to the details of his products. His own presence as a business giant is modest. Unlike Elon Musk, Jeff his Bezos, and Bill Gates (his recent predecessor as the richest people in the world), he’s not a household name. maison de couture, or palace. He’s a regular on his Paris fashion show circuit, but he puts the spotlight on the clothes and the people who wear them. He is soft-spoken, but not soft-touch. As a reporter for this newspaper wrote in 1989, he has a “charming smile, but distinctly steel teeth”. There is no
Arnault has been at the top of the rich list for over 15 years. Some might think that his net worth topped the list this month, according to. forbes$180 billion . But Arnaud, 73, comes from a tech mogul, but he’s reshaped the business world too. He created a paradox, in the words of Bernstein’s Luca Sorca: “selling exclusivity in the millions.” To achieve that, he brought American-style business tactics to one of the most traditional industries, preparing it for a global, premiumized, Instagrammable world. This is an approach that others should emulate.
His indoctrination into bold capitalism came to New York in the early 1980s when he fled French socialism. Little is known about his time there, but when he returned to France in 1984, he quickly deployed the barbaric tactics that emerged on Wall Street. First came the leveraged buyout of him. He finds the timid Christian Dior buried in a beleaguered textile conglomerate. He sold the dregs to polish his 38-year-old crown jewel, Dior. Then in the late 1980s Moët Hennessy Louis He became hostile to Vuitton, eventually ripping it out of the old money behind it. He wasn’t always successful. Italian fashion house Gucci continues to avoid him. He will use his balance sheet to acquire a musty fashion house and turn it into a mega-brand. LVMHworth almost €350 billion ($372 billion) and is currently valued at 75 Maison.
He’s not just a deal maker. He’s a master of hype, recruiting a number of high-profile designers from outside France to shake up fashion establishments. Their shock value doesn’t just stop on the catwalk. Promote his high-margin fashion accessories such as perfumes and handbags. LVMHof the more mainstream bread and butter.In addition, he imposed machine-like efficiencies on the group, modernizing the production process and LVMHWe operate our own stores, not licensees, and employ the best people in the industry.
His discipline extends to profit. He has his eye on the long-term brand and his equity, but quarterly results are rarely missed. The flagship is Louis Vuitton. Solca estimates that it has generated sales of €20 billion. LVMH2021 revenue), operating margin is close to 50%. Gucci pales in comparison. Cash flow allows him to outperform rivals in the flashiest stores and the flashiest marketing his campaigns. Annie Leibovitz’s shot of soccer players Lionel Messi and Cristiano Ronaldo playing chess in a Vuitton briefcase is a good example of this (French striker Kylian Mbappé A selection inspired by Ronaldo).
rake and silver spoon
LVMH Vulnerable. Mr. Arnaud was among the first to recognize the potential of globalization, first identifying Japanese tastes for luxury and then China’s. 2,200+ Asia LVMH The number of stores in 2021 is by far the largest source of revenue. But Russia’s invasion of Ukraine has highlighted geopolitical threats. If the company had to pull out of China, it would be a disaster. Moreover, premiumization comes with growing social inequalities around the world. People believe they can emulate the rich, and that’s good for business. However, frustration may mount if they feel they will never be able to join Monogram’s elite.
But Mr. Arnaud’s European descent gives him a special edge in the wealth bet. He has Old World faith in his lineage. Unlike Musk, who squandered a portion of his Tesla stake on Twitter, Bezos, who ceded a portion of Amazon to his ex-wife, and Gates, who sold most of his Microsoft stake, his top priority is to hold. is.control of LVMH, His family owns an unassailable 48% stake. His five children all work in the business, which Mr. Solca calls a “Darwinian contest” for his successor when he finally retires. No one knows the value of holding the silver of the family better than a lord of luxury. ■
Read the article by Schumpeter, a columnist on global business.
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https://www.economist.com/business/2022/12/20/how-bernard-arnault-became-the-worlds-richest-person How Bernard Arnault became the richest man in the world