Bernard Arnault is an absolute *savage.*
I mean that in the best way.
Over 34 years, Arnault has transformed LVMH into a creative and commercial powerhouse.
Here's how he did it while looking permanently fly 🔥✈️
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readthegeneralist.com/briefing/lvmh-…
1/
LVMH didn't exist until 1987.
It emerged from an all-out war between these three men.
- Henry Racamier, Head of LV
- Alain Chevalier, Head of Moet Henn
- Arnault, owner of Dior
The full saga deserves its own treatment. I go deep in the piece.
readthegeneralist.com/briefing/lvmh-…
2/
Spoiler alert: Arnault won.
He became CEO of the company in 1989 and went on an absolute tear to grow it into the $376B behemoth it is today.
So, how did he do it while crushing such crisp collarless shirts?
3/
There are 3 main "secrets"*
1. Buying heritage
2. Decentralized, artist-led structure
3. Controlled supply chain
These are a little jargony, but we'll unpack them.
(*Hiding in plain sight...)
4/ Buying heritage
LVMH has bought growth.
They've had great organic expansion, too, but a trademark of their strategy is buying dope brands.
That includes names like Tiffany, Tag Heuer, Fendi, Rimowa, etc.
5/
Here's the thing, though.
Arnault picks *super* carefully.
He's not just interested in an asset's financial performance (in fact, he often doesn't seem to care).
He wants brands with *heritage.*
6/
Why?
Bc luxury's a perception game.
Sure, you need to get the best materials and make things well.
But a ton of pricing power comes from the *narrative value* of an item.
Buying heritage brands adds to that, positioning all of LVMH's brands as somehow historic.
5/
One example:
LVMH bought Clos Des Lambrays, a pretty random vineyard dating back to 1365.
Now, is CDL really going to impact LVMH's top-line?
No.
But doesn't it add to LVMH's allure?
6/
Ok, next:
LVMH has a decentralized structure. It's designed to let each of its 75 "Maisons" (companies) do its thing.
You can see the six sub-divisions here...
7/
It's more profound than that though.
The decentralization is *also* supposed to make sure artists can go HAM.
Arnault wants the creatives to set direction, *not* business people — in big and small ways.
8/
The best example?
John Galliano's 2000 show for Christian Dior.
It's often called the "Homeless" collection because Galliano sent models walking down the catwalk in clothing made from actual newspaper.
(It was basically "Derelicte" from Zoolander)
9/
Arnault had heard about the concept before the show, but he hadn't done anything to stop it.
Why not?
Because he didn't want to curb Galliano's controversial genius.
Commercially, it was the right call. Galliano's collection (once turned into fabric) was a massive hit.
10/
Third thing:
LVMH takes obsessive control of its supply chain.
It makes sure it works with the best material suppliers, trains its staff intensely, and puts products through "torture" to make sure they will stand the test of time.
11/
They really do take this to the next level.
For example, to make sure they had enough crocodile skin for purses, the company bought an Australian croc farm.
Job done...
There's a ton more in the piece...
Including:
⚔️ The battle for Succession between the Arnaults
💫 The Parable of the Three Bags
🇨🇭Playing catch up with Richemont
To hear the full, spicy tale, hit the link below and sign up for a membership. You'll be joining over 32,000 awesome readers.
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readthegeneralist.com/briefing/lvmh-…
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