Do you know that Louis Vuitton, Christian Dior, Sephora, and Tiffany & Co. are all owned by one group, which is Louis Vuitton Moët Hennessy (LVMH)?
As of October 2024, LVMH is the largest luxury goods company in the world, with a market value of $346.12 billion. Bernard Arnault is the chairman and CEO of the LVMH group. In May 2021, Arnault gained the title of the world’s wealthiest man after LVMH’s luxury goods sales surged in Asia and China. He regained the title in April 2023 and January 2024, overtaking Elon Musk. Arnault often appears as an elegant Frenchman, but his ruthless business tactics in acquiring rivals have earned him nicknames like “The Wolf in Cashmere” and “The Terminator”.
Rise of the Wolf
In 1949, Arnault was born into a family that owned a civil engineering company. After graduating as an engineer from the École Polytechnique, he joined his family business. However, he soon realised that the company’s business model was too slow and risky for sustainable growth.
During the 1970s, France’s economy suffered from limited credit facilities and strict regulations that delayed payments. Arnault noticed these issues obstructing his family’s business, which required significant investments but yielded minimal returns. He convinced his father to shift focus to real estate, particularly private apartments and high-end vacation villas, which promised better income.
Although his father initially resisted, Arnault eventually won the support of the company’s executives and restructured the business. He started to cut unprofitable ventures and improve efficiency. By 1978, at just 28 years old, Arnault became CEO of his family business. Around this time, France introduced labour laws granting paid vacations to employees. Recognising the opportunity, Arnault focused on building luxury villas near beaches, which became a profitable venture.
The Taxi Ride That Changed Everything
In the early 1980s, France increased taxes on wealthy individuals, prompting Arnault to explore opportunities in the U.S. One day, during a taxi ride in New York, he asked the driver if he knew the French president. The driver did not know but mentioned he recognised the name Christian Dior. This moment inspired Arnault.
He realised the global power of luxury branding and saw an untapped market among the growing middle class and independent women. This motivated him to create a luxury empire catering to every high-end need.
The Christian Dior Opportunity
In 1984, Boussac, a French textile company that owned Christian Dior, faced bankruptcy. Over 30,000 workers were striking, and the government urgently sought a buyer to save jobs. Despite limited resources, which he had only FRF 150 million, Arnault seized the opportunity.
With the help of investment bank Lazard, he secured FRF 400 million. Even then, it was not enough, so he persuaded the French government to lend him FRF 2 billion, promising to rescue the company and its workforce.
Becoming “The Terminator”
After acquiring Boussac, Arnault broke his promises to the government. Over three years, he sold off non-essential assets and laid off nearly 16,000 workers. These actions, though controversial, allowed him to retain Christian Dior, which became the cornerstone of his luxury empire. The French press dubbed him “The Terminator” for his ruthless efficiency.
The Battle for LVMH
By the late 1980s, Arnault turned his attention to LVMH, a group formed by the merger of Louis Vuitton and Moët Hennessy. Internal conflicts between the two founding families made the company vulnerable.
Arnault began quietly buying shares of LVMH. By 1989, he had secured a 43.5% stake and used his position to oust the original management. His tactics were aggressive, but they worked. Le Monde wrote in 1989: “Arnault’s takeover of LVMH marks the rise of a new era in luxury, driven by bold and calculated moves.”
Legacy
Bernard Arnault’s journey from a family business engineer to the world’s wealthiest man is a story of vision, strategy, and determination. Despite his controversial tactics, he transformed struggling companies into a global luxury empire. Today, LVMH dominates the industry, thanks to the man known as “The Wolf in Cashmere”.