For decades, France’s LVMH has been the face of luxury for the wealthy who tote Louis Vuitton bags, don Christian Dior clothing, spritz Bulgari perfume and sip Veuve Clicquot Champagne.
This week, the world’s dominant luxury group — home to 75 high-end brands across fashion, jewelry, watches and alcohol — will be the face of a global event for the masses: the Paris Olympics, with its billions of viewers around the planet.
With a major sponsorship role aimed at burnishing the image of the Games and the French capital, it’s a new chapter in LVMH’s specialty of selling exclusivity at a grand scale under its chair and CEO, Bernard Arnault.
Assembling and growing dozens of exclusive labels under one powerhouse roof has put Arnault, 75, at the very top of Forbes’ list of the world’s richest people. As recently as June 3, Forbes estimated his wealth at $207 billion, narrowly ahead of Tesla’s Elon Musk and Amazon founder Jeff Bezos. With ever-shifting stock-market prices, the three men often trade places (according to Forbes’ real-time billionaires list on Tuesday, Arnault and his family are currently No. 3).
“We tried to find a way to do it, to do something else than just signing a check and getting billboards on the side of the streets,” Antoine Arnault — LVMH’s head of environment and image and Arnault’s eldest son — told The Associated Press on Monday.
The extent of LVMH’s involvement is “unprecedented for a luxury brand,” says Luca Solca, luxury goods analyst at research firm Bernstein. Where such brands used to focus on athletic pursuits more associated with the rich — tennis, equestrian sports and yacht racing — LVMH and its competitors have increasingly used mass sports to reach customers and place a halo of excellence around their products.
“The prize is a high-level association to sports as a universal language that all consumers understand,” Solca says.
While his brands will be front and center, Arnault’s low-key public profile is a sharp contrast with those of Musk and Bezos. Although his company is adept at digital marketing, he’s not on social media himself. He can almost blend into the crowd, sitting quietly in his somber suits in the front row at fashion shows. Unsurprisingly, though, he’s well connected: He received the Légion d’Honneur in March from President Emmanuel Macron, whose wife, Brigitte, taught French to two of Arnault’s sons.
“He is almost like a head of state; he has that level of influence,” says political image consultant Frank Tapiro, dubbing Arnault the “godfather of the Olympics.” Tapiro, who worked with Arnault as creative director for the launch of the Miss Dior perfume, likened him to Louis XIV, the 18th century Sun King famed for wielding incredible power over his capital from afar.
An engineer who started out at his family’s construction firm, Arnault launched his career in luxury by taking over Financière Agache in 1984. He dumped his acquisition’s less attractive businesses, keeping only the crown jewels: Christian Dior and ritzy department store Le Bon Marché. Within five years, he had taken a stake in LVMH and become CEO of the company, born from the merger of Moët Hennessy and Louis Vuitton — brands established centuries before.
Arnault made his fortune by defying conventional wisdom, building a conglomerate in a field where rarity and exclusivity are watchwords. The company’s sheer size has created what Solca calls the “mega-brand virtuous cycle”: Its size and large profits let LVMH recruit top design talent, open bigger and flashier stores in elite locations, and support its brands with marketing and advertising spending that each brand could never attain on its own. That boosts profits further and the cycle repeats.
LVMH today is three times the size it was in 2009. Last year, it reported 86.2 billion euros ($93.2 billion) in revenue and 22.8 billion euros ($24.6 billion) in profit from recurring operations, for a more than 26.5% profit margin — one that businesses in sectors such as automobiles, airlines or food retail can only dream of. It’s a public company, but family-run. Arnault’s five children each play roles, leading to media speculation about who will succeed him at the top; however, his move to extend the retirement age for his job from 75 to 80 indicates he could be around for a while yet.
Source: https://apnews.com/article/olympics-2024-bernard-arnault-lvmh-ceo-0ab4a42d0bb6be6cb3989412ca19d318
