The Moët Hennessy Louis Vuitton (LVMH) group displays three figures on its website’s homepage: 75 brands, 44.7 billion euros in revenue, and 150,000 employees (in 2020). Year after year, the French group has continued to confirm its supremacy in the luxury sector. Whether in fashion and leather goods, perfumes and cosmetics, jewelry, Champagne, or spirits, it offers the height of chic and sensuality across the industry. It has also worked with the most talented creators, such as American designer Virgil Abloh, named artistic director of Louis Vuitton menswear in 2018, who passed away after a battle with cancer on November 28, 2021, at the age of 41.
Leather goods have always been the cornerstone of the empire currently directed by Bernard Arnault, the wealthiest person in France (161 billion dollars, according to Forbes) and the second richest in the world – after Amazon founder Jeff Bezos.
But this extraordinary success began with an artisan born in Jura, in Eastern France, not far from Switzerland. Louis Vuitton was born into a modest family on August 4, 1821, in the village of Anchay, 25 miles from Lons-le-Saunier. His father François-Xavier was a miller and a carpenter, and quickly taught him to work with wood. The boy soon mastered the arts of oak, cherry, and poplar – knowledge that would become vital in his professional journey.
At the age of 14, he left his family to try his luck in Paris. As was customary at the time, he walked the 250 miles from his native village to the capital. In 1837, he was hired as an apprentice by a “trunk-maker, casemaker, and packer” and began
learning to make travel trunks. Before too long, his expertise began turning heads. Yet it took another 17 years for him to open his own workshop on Rue Neuve-des-Capucines, between the Madeleine church and Place Vendôme, and launch the Louis Vuitton brand in 1854. His new venture was an instant success – especially as his most loyal customers included the Empress Eugénie, the wife of Napoleon III.
A Trunk-Maker to J.P. Morgan, Hemingway, and Lauren Bacall
In 1858, Vuitton revolutionized the market by creating the very first flat trunks, making them easier to stack and transport than the traditional bowed chests. His products were a hit among a rich clientele indulging in long-distance travel thanks to the rise of the railway.
In an effort to outsmart counterfeiters, the trunk-maker clad his products in a beige-and-brown print with the inscription Marque Louis Vuitton déposée (Patented Louis Vuitton brand). This was followed by the arrival of soft leather luggage, another major innovation of its time. In parallel, the business began developing abroad. The first store outside France opened in 1885 on Oxford Street, the main shopping district in London. Others in New York and Philadelphia soon followed.
After Louis, who died in 1892, several generations of the Vuitton family successively headed up the company, each making their own contribution. For example, in 1896, the founder’s son Georges designed the now-renowned “LV” monogram which remains the brand’s icon today. The Louis Vuitton company, having become the world leader in premium luggage, merged with Moët Hennessy, the champion of Champagne and Cognac, to create LVMH in June 1987. Shortly after, in 1989, businessman Bernard Arnault, took over the new entity in partnership with Irish brewery Guinness and with the help of the Lazard bank. While this was a skillful financial operation, the new owner had a backstory of his own.
After acquiring the Boussac textile group, the Christian Dior couture house, and Le Bon Marché, he was already a major player in the industry. Under its new leadership, LVMH went from strength to strength with the addition of new jewelry and fashion departments. In 1997, the reins of the ready-to-wear division were handed to Marc Jacobs. Thanks to the American designer, Louis Vuitton’s reputation skyrocketed.
However, Bernard Arnault’s group does not launch new companies; instead, its strategy focuses on buying up prestigious brands and creating synergies between them. One of the latest acquisitions was U.S. jeweler Tiffany & Co., purchased in 2019 for 15 billion dollars. But not everything Bernard Arnault touches turns to gold. In fact, in the late 1990s, he failed to acquire the haute-couture brands Gucci and Yves Saint Laurent, which were both purchased by French billionaire François Pinault, his archnemesis in the luxury world.
A Third of Sales in the United States
As the global luxury leader, LVMH even outstrips Kering, owned by François Pinault, and the American group Estée Lauder. However, the company makes just 5% of its sales in France, with the United States alone making up 33%. With more than 270 billion euros, it is currently the biggest market capitalization in Europe, ahead of Nestlé and Roche. On average, fashion and leather goods (including Dior, Givenchy, Kenzo, Fendi, Berluti, Céline, Marc Jacobs, and, of course, Louis Vuitton) generate some 40% of the group’s revenues. Perfumes and cosmetics (such as Guerlain, Givenchy, Dior, Benefit Cosmetics, and Acqua di Parma) represent 10%, while the jewelry and watchmaking giants (Bulgari, Chaumet, Fred, Hublot, Tag Heuer, and Tiffany) make up around 8%.
Boasting labels from Moët & Chandon, Hennessy, and Château d’Yquem to Dom Pérignon, Krug, Veuve Clicquot, Canard-Duchêne, and Ruinart, without forgetting the Ardbeg, Cardhu, Glenmorangie, and Talisker whiskeys, the group also owns prestigious names in the wines and spirits sector. It has a number of luxury hotels (through its Cheval Blanc and Bulgari brands), and leading media companies such as Le Parisien, Les Echos, and Radio Classique. However, the business scope of LMVH doesn’t stop there. Le Bon Marché and La Samaritaine, two of the most famous Parisian department stores, are also in its portfolio, along with Sephora, a chain of perfume and cosmetics stores, with almost 2,300 outlets across 33 countries.
The group is also a patron, and in 2014 opened a magnificent museum in the Bois de Boulogne, the Fondation Louis Vuitton, aimed at promoting modern and contemporary art. But despite this prolific diversification, and although each house retains and cultivates its own bold identity, Louis Vuitton is still the driving force of LVMH and makes up half of its profits. Two centuries after he was born, the icon of French craftsmanship is still inspiring the brand’s designers.