LVMH

LVMH, multinational conglomerate headquartered in Paris that is the largest luxury goods group in the world. LVMH owns 75 luxury brands, including Louis Vuitton, Christian Dior, and Tiffany & Co. It is the only group whose subsidiaries span all five sectors of the luxury goods market: wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewelry, and selective retailing.

History

LVMH began in 1987 when Henri Recamier, then the head of Louis Vuitton, announced the merger of his company with Moët Hennessy. The latter was itself a merger, formed in 1971 between Moët & Chandon, a historic producer of champagne known especially for Dom Perignon, and Hennessy, a leading producer of cognac. Three years later Recamier was ousted from the company in a hostile takeover by Bernard Arnault, who became chairman and CEO of LVMH.

Arnault focused on increasing LVMH’s growth by acquiring existing companies and brands in various luxury sectors, including the French fashion houses Christian Lacroix, Givenchy, and Kenzo; the leather goods companies Loewe, Celine, and Berluti; the jeweler Fred Joaillier; the duty-free chain DFS Group; and the beauty retailer Sephora. He pursued this strategy so effectively that LVMH’s revenue increased 500 percent from 2005 to 2022, when it also announced annual profits of over €20 billion.

Fashion

LVMH has nurtured a reputation for promoting creativity and artistic talent in the fashion market. In a 2014 interview with the management consulting firm McKinsey & Company, Pierre-Yves Roussel, then the CEO of the LVMH fashion group, described how the company sought out creatives who were able to innovate and keep iconic products relevant. Indeed, one such creative, Marc Jacobs, reinvigorated the classic Louis Vuitton handbag by collaborating with designer Stephen Sprouse and with the Japanese visual artist Takashi Murakami. The former successfully marketed the Speedy graffiti handbag (2001), which looked as if it had been spray-painted with the company’s name, and the latter produced the critically acclaimed Eye Love Monogram collection (2003), which replaced the brand’s traditional beige-and-brown monogrammed canvas with a multicolored palette featuring pop-art graphics, such as cartoon eyes. LVMH is also known for having cultivated the talents of such designers as John Galliano, Virgil Abloh, and Phoebe Philo. In 2014 Arnault’s daughter, Delphine Arnault, then the Louis Vuitton executive vice president, launched the LVMH Prize for Young Fashion Designers, which grants one fashion design graduate €300,000 and supports the development of the winner’s company.

Scandals

Despite its successes, LVMH has not been without its scandals. From the very beginning of Arnault’s tenure, his aggressive style raised eyebrows and often led to vitriolic lawsuits, as when he ousted Recamier during LVMH’s earliest years and when he attempted to pull out of purchasing Tiffany & Co. during the height of the COVID-19 pandemic in 2020 (the deal was ultimately completed in 2021). Other scandals include accusations in 2011 that Christian Dior designer Galliano made racist insults in a Paris café—he was subsequently fired—and a 2021 criminal probe stemming from LVMH’s employment of a former French intelligence chief, who was accused of spying for the company—LVMH paid €10 million to settle the claims.