The French retail group LVMH (Louis Vuitton Moet Hennessy) is the world’s largest leading luxury conglomerate with 75 of the most prestigious brands from six different branches, going from fashion to wines, 79.2 billion euros revenue in 2022 and retail network that counts more than 5.600 stores worldwide.
The history:
The group was founded in 1987 by the ideas of Bernard Arnault, a French investor, Alain Chevalier, CEO of Moët Hennessy and Henry Recamier, president of Louis Vuitton. The concept had a huge success and other similar conglomerates of famous growing brands were created, the most important were, and still are, PPR (now Kernig) and Richemont, respectively French and Swiss based.
The first acquisition happened in 1988 with Givenchy, founded in 1952 by Heubert de Givenchy, initially focused on women’s wear before venturing into men’s wear, cosmetics and fragrances.
From 1993 to 1997 the group acquired Kenzo for 80 million dollars, Céline for 540 million, at first purchased by Arnault then integrated into LVMH, Loewe and Marc Jacobs, who also served as creative director of Louis Vuitton until 2013.
Between 1999 and 2001 LVMH attempted to takeover Gucci by buying every share available on the market and becoming its largest stakeholder. After a long negotiation Gucci’s CEO, Domenico de Sole, refused to join the group spreadhead by Arnault and sold 42% stake to their major competitor, PPR for 3 billion dollars. What happened in the years that followed has been described as “one of the most bitter fights in corporate history” with several lawsuits against each other. An agreement was found in 2001 when LVMH sold their shares in Gucci to PPR for 806 million dollars.
In 1999 the group, in a joint venture with Prada, acquired 51% of Fendi’s stakes. In 2001 Prada sold its shares to LVMH for 225 million dollars, since then the French group has increased its stakes to 85%.
The same year the Italian brand Emilio Pucci 67% majority stakes were acquired for an unknown sum.
Moving to 2011, the prestigious Bulgari family made a deal on 3% of LVMH in exchange for their 50.4% shareholding in the jewelry firm. The deal was worth 6.01 billion dollars.
In 2016 LVMH took over RIMOWA, the German luggage company, by paying 716 million dollars for 80% stake.
A significant acquisition happened the next year with Christian Dior. The fund and the French fashion house were already very bound by having both Bernard Arnault as CEO. The transaction was worth 13.1 billion dollars and Dior acquired 42% of shares and 59% of voting in LVMH.
During 2019 LVMH and Rihanna took part in a joint venture and launched a new beauty label Fenty, owned in majority by the fund.
The same year Arnault prearranged the most expensive takeover in LVMH’s history for the jewelry giant Tiffany & Co. at a whopping initial price of 16.2 billion dollars, the deal closed at the beginning of 2021 for 15.8 billion.
The last fashion play of the group was the acquisition of a minority stake in the New York-based fashion and lifestyle brand Aimé Leon Dore.
A separate mention must be made for Hermes, in 2010 the CEO of the brand, Patrick Thomas, found out that LVMH had been secretly buying Hermes shares through the years and had accumulated a total of 17.1%. In 2010 the French financial watchdog Autorité des marches financiers (AMF) started investigating LVMH’s acquisition. Meanwhile LVMH increased its stake to 22.6%. In 2013 the fund was fined 13.2 million dollars for not informing the public of its acquisitions as that would impact share prices. In 2014 LVMH agreed to distribute Hermès’ shares to its stakeholders and it would not acquire any in the following five years. From then Arnault’s ownership is fixed at 8.5%. Further investigations were made but with not relevant findings.
Philanthropy of the group:
Since the early 1990s LVMH has developed a broad philanthropy program focused on several areas of culture and art with particular attention to young talents.
Their support to more than 60 major exhibitions all over the world has enabled millions of visitors to experience art in all its forms with works from past masters and contemporary artists.
The youth program, active for more than 25 years now, gives the possibility to conservatories students to attend exceptional concerts in Paris, thanks to the “1000 seats for youth” program and to purchase musical instruments letting thousands of students learn to play instruments across France. Furthermore, young virtuous have the chance to take master classes with stars of the music industry.
Since 2014, the Fondation Louis Vuitton in Paris has hosted many exhibitions, becoming a benchmark for the international art and culture community.
In 2019, with the tragic passing of Karl Lagerfeld, LVMH announced a new annual fashion prize, in addition to many others, in honor of him where an up-and-coming designer will win a one-year mentorship program in addition to 150.000 euros.
The same year a 200 million donation was made to help save and restore Notre Dame de Paris after the fire that destroyed part of the monument.
During the pandemic crisis the group moved its production of perfume and alcohol towards hand sanitizer, offered to the hospitals in Paris.
Last year Louis Vuitton donated 1 million euros to UNICEF to help Ukrainian victims of the war against Russia and LVMH devolved 5 million euros to the Red Cross for the same cause.
The future:
Bernard Arnault recently overtook Elon Musk and became the richest man in the world with a net worth of 228.2 billion dollars.
Delphine, the eldest of Arnault’s five children and only daughter, previously in the role of executive vice-president of Louis Vuitton, is now CEO and chair of Dior since last February.
Antoine, the oldest son, is CEO of shoemaker Berluti, non-executive chair of Loro Piana and since last December also CEO of Christian Dior SE, the holding company used by the family to control LVMH. Antoine is also a board member of LVMH and company head of image and environment since 2018.
Alexandre is Arnault’s first son with his second and actual wife Helene Mercier. After four years as CEO of Rimowa where he revitalized the German luggage brand, in 2020 with the acquisition of Tiffany & Co. by the fund Alexandre at 28 became executive vice president of product and communications at the jewelry giant.
Frédéric, born in 1995 is the CEO of TAG Heuer from 2020.
Jean is Bernard’s youngest son and joined LVMH months after graduating in August 2021 with a role as marketing and development director of Louis Vuitton’s watch division.
Last year LVMH changed the company’s bylaws extending the chief executive maximum age from 75 to 80 giving Arnault, now 74, some more years before leaving the lead of the colossus to his children.
Timeline:
- 1987 LVMH was founded
- 1988 first acquisition, Givenchy
- 1993-1997 takeover of Kenzo, Céline, Loewe and Marc Jacobs
- 1999-2001 attempted acquisition of Gucci
- 1999-2001 Fendi
- 2001 Emilio Pucci
- 2010-2015 Hermes case
- 2011 Bulgari
- 2014 Creation of Fondation Louis Vuitton
- 2016 RIMOWA
- 2017 Christian Dior
- 2019 Rihanna and LVMH launched Fenty
- 2019 Karl Lagerfeld fashion prize
- 2019 Donation for the Notre Dame restore
- 2019-2021 Tiffany &Co.
- 2022 Aimé Leon Dore
- 2022 Donations to UNICEF and Red Cross to support Ukraine