The history of the largest luxury conglomerate
Year of foundation: 1987
Country: France
LVMH is home to 75 outstanding companies rooted in six different sectors: wines & spirits, fashion & leather goods, perfumes & cosmetics, watches & jewelry, selective retailing, hospitality.
LVMH is present in more than 60 countries and operates more than 5,000 stores.
3 key business strategies:
— Attack is the best defense. Acquisition strategy: «it’s your fault that I want to eat»
— Exclusivity and visionary. Logomania: LV — as an art object in the context of contemporary art.
— Eternal rejuvenation. Injections of young blood. Connection with the young generation and young creative energy
More
Absorption strategy. Attack is the best defense.
The history of LVMH actually began with a legitimate seizure of power.
At that time, Henri Recamier was the head of Louis Vuitton. He announced the merger of his company with Moët and Hennessy. Here’s a note:
- On the one hand, Moët received investments from Guinness (a champagne distributor) and gave it 20% of the company;
- Henri Recamier (head of Louis Vuitton) similarly received investments from Bernard Arnault and gave him 20% of the company.
As a shareholder of the company, Arnault negotiated with Moët and Hennessy, but did so secretly, behind Henri Recamier’s back. He created a separate parallel joint venture with Moët and Hennessy, which received part of the LVMH shares as investments. It was 37% — less than half, but Arnault himself had another 20% of the company. As a result, LVMH owned 57% — a controlling stake.
On September 26, 1987, at a shareholders’ meeting, Arnault directly stated that the new company LVMH controlled a controlling stake in Moët, Hennessy and Louis Vuitton, and that it was a single enterprise. He also announced the removal of Recamier. The post of head of the new LVMH corporation, along with controlling rights to these three brands, was received by Arnault’s father, Jean Arnault. Cold-blooded, legal, effective.
This style of «fighting by the rules» defines the corporate culture of the holding to this day.
LVMH is known for its aggressive growth through high-profile acquisitions, thanks to which it became the largest player in the luxury goods market. The start of the empire: Christian Dior. Dior belonged to the textile holding Boussac. Arnault acquired the holding in its entirety, and this became one of LVMH’s most important moves. Arnault used Dior as a springboard and foundation for the development of LVMH. Dior became the locomotive of his fashion empire.
Arnault focused on acquiring what was “weakening” or “lying badly”. He was engaged in careful and systematic monitoring of existing companies and brands in various luxury sectors that had growth potential.
His attention and commercial interests included the French fashion houses Christian Lacroix, Givenchy and Kenzo; leather goods companies Loewe, Celine and Berluti; jewelry house Fred Joaillier; duty-free store chain DFS Group and multi-brand cosmetics chain Sephora.
3 pillars of LVMH
Here are some of Bernard Arnault’s iconic acquisitions:
Fendi (2001)
In 2001, LVMH, together with Prada, acquired a controlling stake in the Italian fashion house Fendi, known for its luxurious fur products and accessories. LVMH soon bought Prada’s stake, becoming the sole owner.
Bvlgari (2011)
In 2011, LVMH acquired a controlling stake in the Italian jewelry house Bvlgari for approximately €4.3 billion. The acquisition strengthened LVMH’s position in the jewelry and watch segment, making Bulgari the flagship brand in this category.
Loro Piana (2013)
In 2013, LVMH acquired 80% of the Italian luxury fabric and clothing manufacturer Loro Piana for €2 billion. Loro Piana is known for its quality and specializes in clothing made from cashmere and other high-quality materials, which fit perfectly into LVMH’s luxury brand portfolio.
Rimowa (2016)
In 2016, LVMH acquired 80% of the German luggage manufacturer Rimowa for €640 million. Rimowa is known for its stylish and functional aluminum suitcases. The deal was the first major acquisition overseen by Alexandre Arnault, the son of Bernard Arnault.
Tiffany & Co. (2021)
One of the most high-profile acquisitions in the company’s history was the acquisition of the American jewelry brand Tiffany & Co. for $ 15.8 billion in 2021. The deal was the largest in the history of LVMH. It allowed LVMH to expand its presence in the United States and strengthen the company’s position in the global jewelry market.
Today’s intrigue: will Richemont be the next deal?
In mid-2024, it became known that Bernard Arnault personally acquired a stake in the Swiss company Richemont, (including Cartier and Van Cleef & Arpels). This move caused a wave of speculation in the luxury industry, whether Arnault’s purchase is a private investment or is related to LVMH’s corporate strategy.
STRATEGY OF EXCLUSIVENESS & VISIONARY BEHAVIOR. THE LV LOGO AS AN ART OBJECT IN THE CONTEXT OF CONTEMPORARY ART
LVMH — and the cult of the LV logo
Always in search of creative visionaries. The pioneer was Marc Jacobs, who breathed new life into the logo on the classic Louis Vuitton bag. Cultivating the logo is a thoughtful and consistent marketing strategy through partnership projects with contemporary non-conformist artists and, most importantly, newsmakers. Bright and noticeable projects have turned the Louis Vuitton logo into an iconic modern design object. And the brand itself, existing in this context, has become a direct beneficiary — a symbol of exclusivity and intellectual aestheticism.
- Stephen Sprouse: The artist who created a collection with graffiti on the classic pattern of the Louis Vuitton monogram. Takashi Murakami: A Japanese artist who has created vibrant and colorful versions of the LV monogram.
- Jeff Koons: An American artist who has brought famous works of art like Van Gogh and Da Vinci to Louis Vuitton bags.
- Yayoi Kusama: A Japanese artist known for her dotted patterns and avant-garde work.
- Richard Prince: An American artist known for his «Joke Bags» project, which features comedic phrases and illustrations.
- Urs Fischer: A Swiss artist who has created a collection of warped logos and unique prints for Louis Vuitton.
- Virgil Abloh: An American designer and creative director of Louis Vuitton’s menswear line, who has brought streetwear elements to the brand.
- Nigo: A Japanese designer who collaborated with Virgil Abloh on the LV² collection, which merged Japanese streetwear and luxury.
The quintessence of the desire (and opportunity) to be at the forefront of contemporary art — the place of power of contemporary art — Louis Vuitton Foundation.
REJUVENATION STRATEGY — INJECTIONS OF YOUNG BLOOD». CONNECTION WITH THE YOUNG GENERATION AND YOUNG CREATIVE ENERGY
LVMH Prize is a prestigious international award, established in 2013 to support young designers from all over the world. The winner can be from any country. The winner of the award receives a grant of 300,000 euros and a one-year mentoring program from LVMH experts. In addition to the main prize, the Karl Lagerfeld Prize is also awarded, named after the legendary designer for special skill and originality.
Some of the most successful winners of the award include:
- Grace Wales Bonner (2016): British designer, founder of the Wales Bonner brand, which combines African and European cultural codes in clothes.
- Marine Serre (2017): French designer, known for her futuristic style and use of recycled materials.
- Thebe Magugu (2019): South African designer, who creates clothes with deep cultural and historical references, which makes his brand unique.
- Simon Porte Jacquemus (2015): French designer, founder of the Jacquemus brand, known for minimalist and feminine silhouettes.
- Thomas Tait (2014): Canadian designer, who became the first winner of the LVMH Prize. He is known for his minimalist and innovative approach to tailoring.
- Masayuki Ino (2018): Japanese designer, founder of Doublet, a brand that combines elements of streetwear and avant-garde style.
- Hed Mayner (2020): Israeli designer known for his minimalist approach and voluminous silhouettes that combine tradition and modernity.
- Nensi Dojaka (2021): Albanian designer known for her intricate work with transparent materials and feminine shapes.
And Off White is up for sale, as it lost its youthful visionary vibe with the departure of Virgil Ablo.
FACT LIST от FCG. LVMH