LVMH

"This result would nevertheless suffice for the happiness of his father who is himself a graduate of Ecole Centrale... but this does not satisfy Bernard's ambition who wants to enter Polytechnique, which he succeeds in the following year. Such is his determination... After Polytechnique, he enters the family business in which he immediately makes his mark."

"It must be said that the holder of the second greatest fortune in the world has enough to impress, even Bolloré, twenty times less endowed, according to Challenges' ranking. The latter acknowledges it with humor, when he says to those around him: "He is truly stronger than me. If I had invested the money I earned in LVMH stocks, I would be much richer...". However, the two billionaires started their journey almost at the same time, in the early 1980s, following very parallel paths, without almost ever crossing paths: they are only known to have one common investment, before Lagardère: the music channel Mezzo, acquired on a 50/ 50 basis by Les Échos (owned by LVMH) and Canal +, in July 2019. But for the rest, what similarities!"

"Here are two entrepreneurs who are also heirs; who have tremendously developed what they inherited, even though Férinel's real estate was in much better condition than Bolloré's papers; who each identified a sleeping beauty (Dior, within the Boussac empire, for Arnault, and Rivaud bank for Bolloré); who followed the advice of the same godfather in the Parisian establishment-Antoine Bernheim-to finance their rise to power; who ensured the construction of their empire through a very unusual blend of entrepreneurial aggression and ability to leverage new financial market instruments; who experienced both failures and windfalls (Gucci for Arnault and Bouygues for Bolloré); who moved into the new century without forgetting how to wield hostility (Hermès and Havas learned this to their detriment); who practiced financial engineering with incredible dexterity-Arnault increased his share of LVMH's capital from 38% to 46% in one day, crushing the Christian Dior holding, while Bolloré reached 27% in Vivendi, thanks in large part to the billions inherited from the opportune merger of the communication group with Havas; and who, finally, share the same dynastic ambition, a fierce determination to firmly establish this resolutely familial choice over time. In fact, it is the defense of family capitalism that is the cause of their joint presence in Lagardère's capital, and the potential source of a collision..."

"Bernard Arnault, the French number one, and one of the richest men in the world thanks to the global strength of the fifty brands of LVMH. In reality, their successes rely on very different factors. Arnault focused on the luxury sector, with some forays into his personal portfolio (distribution, technology, private equity, press, etc.)."

"At the same time, the executives of Kroll Associates in France, an American economic intelligence company engaged by LVMH for several weeks to find any exploitable weaknesses in both Gucci and De Sole and Ford, fax the news highlights to their European management in the UK, without hiding their surprise: "We are speechless," they write. The intelligence agency wasn't informed..."

"the Bernard Arnault of the time as a "young know-it-all, quick to talk back." In 1989, when his friend, in the midst of a battle for control of LVMH, was facing criticism from the press denouncing his coldness and insensitivity, Lefebvre even claimed to find him "more relaxed than he was a few years ago.""

"was. It is true that conversely, Pierre will be led to take care of Bernard's personal affairs, especially after the failure of his first marriage, at a time when LVMH leaders will suffer from the mix of his private and professional life."

"It is better to deal with God than with his saints. The Moët-Hennessy clan reacts like Chevalier: since Racamier opened the door to Arnault, they might as well deal directly with him! A royal path thus opens up before the boss of Financière Agache. Especially since David Dautresme recovers 12% of the capital of LVMH, just by making a few phone calls. These securities are, in fact, in the hands of the six investors to whom the OBSA issued by Moët-Hennessy in 1987 had been placed. Since then, these securities have discreetly remained parked in these six parking lots: UAP, Caisse des dépôts, Crédit agricole, Worms Bank, BNP and... Lazard, lead manager of the operation. Dautresme is thus negotiating with these establishments the conditions for the sale of these OBSA to Bernard Arnault. But the sellers must not appear, as it was stipulated that these securities had to be placed in the general public. Also, once the terms of the transaction are agreed upon, they will be invited to go through a discreet Belgian-Luxembourg intermediary, Belmavobel International Securities."

"This document has one merit: it shows that it was Henry Racamier who went to fetch Bernard Arnault. And it gives the latter legitimacy to at least set foot in LVMH, without prejudice to the betrayals and counter-betrayals of others later on. "From the start, I was deceived," Bernard Arnault would later assert. The principles are set: execution will take the form of a friendly takeover bid for 30% of LVMH's capital, as allowed by law at that time. The shares will be purchased by Financière Agache at a price of 3,000 francs and brought to a joint company owned equally by the two allies. The day of the assault is set for Monday, June 27. This takeover bid was concocted by André Battestini of Paribas, who advises Racamier. Lazard is not in on the deal. This crime of high treason (and self-interest) will have serious consequences."

"The head of LVMH assures that the company has finally achieved balance, but his remarks suggest a certain distance from his beloved creator: "Christian Lacroix did not sufficiently focus on the sale of his products. Since then, he has evolved. He now knows that real success is necessarily commercial and that success with fashion critics is good, but it is not enough," writes Arnault in his inimitable style: “LVMH does not have a vocation to be only a patron."."

"without any fresh money input, a few well-born or industrious families have firmly taken control of LVMH, the world's leading luxury group. It's hard to be critical in the Belle Époque setting of Maxim's, even if sometimes one catches a slightly ironic glance."

"Lévêque knows that he will soon be ousted by the returning Socialists. Eager to make a big splash before his departure, he has decided to sponsor the secret alliance between Arnault and Racamier by opening up a first credit line of 2 billion francs to his protégé. He will be able to mobilize more than 5 billion to take 20% of LVMH. In reality, Crédit Lyonnais is offering Bernard Arnault an almost unlimited right of withdrawal that day. Arnault therefore continues his purchases on the stock market, which has the consequence of alarming Chevalier, who still doesn't know where the attack is coming from. On May 31, 100,000 LVMH shares are traded, 98,000 on June 1, 169,000 on June 2, compared to 25,000 under normal circumstances. The group is dancing on a volcano."

"For Arnault, on the other hand, the crash is a new stroke of luck. The opportunity is unexpected. Especially since, for months, he has been amassing ammunition. In September, one month before the crash, he put 13% of Conforama's shares on the stock market, which earned him nearly 300 million francs. A little later, it was Arnault and Associates, the head company, that was introduced to the second market. And in November, Financière Agache obtained a long-term credit of more than 800 million francs from a banking consortium led by Crédit Lyonnais. What does Arnault do with this war chest? With the support of Lazard bank, he buys LVMH shares, both personally and through Financière Agache."

"The head of Louis Vuitton and the head of Financière Agache sign a six-point protocol to jointly take control of LVMH. The document exists in only two copies and has only four pages. Each term has been weighed. It states in the preamble that "given the project under way to introduce a foreign shareholder to a significant extent into the capital of LVMH, a project carrying a very great danger in the long term for the unity and integrity of the company, Messrs. Racamier and Oligastro have deemed it necessary, for the protection of the company and its shareholders, especially the Vuitton family, to approach the Arnault group... The intention of the two parties is to maintain the LVMH group's belonging to the typically French domain of high quality and prestige, as well as to protect it against the risks of dismantling2"

"This is the birth of LVMH. "We have decided to come together to form a new and very important global entity in the field of high-quality and prestigious products with a strong export vocation," he explains. Henry Racamier, seventy-four years old, adds: "Together we will be stronger." In response to questions, Alain Chevalier lists superlatives. With 13 billion francs in turnover, the new group will be the world leader in luxury industries: 1.3 billion francs in profit, 25 billion francs in market capitalization, enough to impress opponents."

"To achieve his goals, however, he made a major concession to Henry Racamier: LVMH would be led by an executive board and a supervisory board, a more collegiate organization that, for Racamier, would bring more autonomy to the various components of the group. Chevalier cannot oppose this new organization, desired by his shareholders, but he does not appreciate it. He senses that these two capitalists will constrain him, the salaried manager, to execute their choices. For the first time since he became president of Moët-Hennessy in 1982, he discovers that he has shareholders."

"The Jacques Rober construction is admirably crafted. It gives Arnault, in his offensive, the financial support of the powerful Guinness battalions, while leaving him in control as the majority shareholder. How could the English brewer accept to be so bound and tied? He wanted at all costs to participate in LVMH's capital to consolidate his global distribution agreement in wines and spirits signed in 1987, which brought him a quarter of his profits, or more than 1 billion francs. Anthony Tennant, the head of Guinness, was convinced that he had no chance of succeeding alone in making a strong entry into LVMH due to the nationalist reactions of the French public and authorities, for whom the luxury group is part of the national heritage. With Chevalier's endorsement, Arnault would have argued that he had the support of the public authorities and that the most effective way to enter LVMH was to partner with him. This was confirmed by his own advisory bank, which was none other than... Lazard Brothers in London."

"On this chilly late morning, the old sly gentleman has just thrown himself into the lion's den. Earlier, just as the board meeting of LVMH was starting, Bernard Arnault had rushed into Béatrice Bongibault's office. She had been hired the day before as the new CEO of Dior. He had told her, "I may not have time to take care of you, because I'm onto something big." Unlike his usual self, he had burst out laughing, a carnivorous laugh."

"them. Thus, through his initiatives, Henry Racamier has created a united front against him. Which Bernard Arnault skillfully takes advantage of to win the game. Because everyone, now, owes him: Chevalier, whose situation he preserves, Moët and Hennessy, whom he saves from marginalization, Guinness, whom he allows to take a significant, albeit indirect, stake in the capital of LVMH. Even Racamier himself, who still believes that their interests, those of luxury, will eventually converge against the camp of wines and spirits. He still sees himself as the indispensable main shareholder."

"On October 28, the Paris Stock Exchange literally collapses: faced with the massive influx of sell orders at any price, more than half of the 180 main stocks cannot be listed. The LVMH stock is particularly affected. It loses 40% of its value and falls to 1,200 francs, which brings the value of the group to 13 billion francs (2 billion euros). For Racamier and Chevalier, everything has to be redone. The bubble has burst. At current prices, LVMH becomes a target again. Everything is possible once more."

"Above all, a few days before the meeting, LVMH's stock has once again soared on the stock exchange. Who is buying? Racamier started it. Immediately, Arnault reacted by taking 10% of the capital. He brings out the big guns in the face of his rival's rifle. "It was an attack, it was entirely legitimate that we respond without delay," explained the CEO of Dior to justify this investment of 4.1 billion francs made in three days, without his partner Guinness being consulted, contrary to the terms of their agreement, which will provoke the anger of Anthony Tennant, forced to finance 40%. The Englishman is starting to think that young Arnault is exaggerating. But can he go so far as to endanger the global distribution agreement between the two groups? Not really. And the presence of Alain Chevalier helps to calm him down."

"Article 1 clearly states the purpose of the maneuver: "The two parties have decided to join forces in this operation to achieve a direct and indirect holding of control of LVMH on an equal footing [...]. The Arnault group undertakes not to carry out the operation without the Vuitton group. The Vuitton group, for its part, undertakes to form an alliance with the Arnault group and to help it take a direct or indirect participation of the same level as that of the Vuitton group in the capital of the LVMH company in order to give the Arnault group and its allies a participation in the capital identical to that of the Vuitton group." Article 2 marks the preeminence of Henry Racamier in the tandem: "In the event of a successful operation, it is agreed that Mr. Henry Racamier will be the first representative of the two parties within LVMH and that Mr. Bernard Arnault will succeed him. The terms of this succession, as well as the composition of the supervisory, management and/ or board of directors of the LVMH company and any other joint venture, will be specified later, in a search for parity between the Vuitton group and the Arnault group and in respect of the above preeminence.""

"However, the arrangement around Dior did not go as smoothly as expected. When he organized it, Arnault never doubted for a moment that the Dior shares issued would sell like hotcakes. Although they were expensive, he believed that the name Dior, along with the control of LVMH, would be magical enough to attract the wallets of French and international investors to whom they were offered. However, the plan seemed a bit far-fetched. Indeed, to everyone's surprise, investors hesitated. Crédit Lyonnais, the lead underwriter, encountered more difficulties than anticipated. Apart from the Japanese insurer Nippon Life, which invested 500 million francs, foreign financiers stayed away. The remaining shares were left in the hands of Crédit Lyonnais, which had to wait some time to recoup its funds. Eventually, Guinness, as part of the overall negotiation, took over the 16% stake in Dior's capital that the bank had no use for."

"Before even finalizing the Jacques Rober deal, Financière Agache and Guinness start buying LVMH shares on the stock market. On July 4th and 5th, they scoop up more than 10% of the capital in front of stunned traders who don't know what's going on. With the addition of the OBSA, the Franco-British tandem potentially holds 24% of LVMH."

"Six months were enough. Bernard Arnault had won. Better still: he had closed the door behind him. Because of his hussar-style offensive, the Stock Exchange Operations Commission would now require any buyer of more than 33% of a listed company's shares to launch a takeover bid for at least 66% of the capital, to protect the interests of minority shareholders. No one would be able to conquer a company the value of LVMH without paying the price. Door closed behind him? In France, yes, but not everywhere. Because this regulation does not exist in the Netherlands. This would allow François Pinault, ten years later, to do the same thing to Arnault with Gucci as Arnault had done to Racamier and Chevalier!"

"Bernard Arnault, a minority in votes, facing the Vuitton clan, had no interest in revealing himself. Sitting for the first time alongside his two illustrious partners, he even gives a noticed nod to management: "I trust the men in place. Alain Chevalier retains full latitude to lead the company. You don't change a winning team.""

"If Arnault launched this blitzkrieg, it was to strengthen his hand in view of the general assembly: he now has a stake of 29.4%, not counting the virtual shares that are the OBSA. Problem: his recently purchased shares do not enjoy double voting rights. The Vuitton clan, despite having a smaller share of the capital (nearly 24%), controls 30% of the votes."

"The simplest, of course, are the dividends. While the payout ratio (percentage of profit distributed to shareholders) was 28.1% in 1991, it reached 41.4% in 1996, or 1.68 billion francs. Over time, this growth in dividends, in volume and as a percentage of profits, will mechanically push the LVMH share price higher, at least until 1996 when it reaches its all-time high at 1,327 francs: with 110 billion francs (16.77 billion euros), LVMH becomes the largest French company in terms of market capitalization, ahead of Elf and Carrefour, which follow closely at 100 billion."

"His friend Michel Lefebvre, who succeeded him at the head of Férinel, confirmed what was now predictable: "He's a bulldozer. He's decided to take control of LVMH; he'll go all the way.""

"On RTL radio, Alain de Pracomtal had stated that Bernard Arnault should maintain the stock prices of LVMH so that all shareholders could exit under the same conditions. This was equivalent to requesting a takeover bid that Arnault could not afford. But the new boss is watching closely. He knows the weaknesses of everyone involved and combines the quality of his information with a real sense of persuasion. Pracomtal will quickly change his mind."

"His most difficult appointment takes place in the evening, during a dinner with Anthony Tennant. The dispute between the two men is considerable. Tennant was on the verge of betraying Arnault in recent days. Each of them, one after the other, had solo purchased LVMH shares, in violation of their agreements that bind them within Jacques Rober. For this, Tennant had even threatened Arnault with legal action by letter. And Arnault, for his part, had stopped the last attack by brandishing the accusation of insider trading to the administrators. The dinner continues until 5 am, in the small light of dawn: unheard of for an early riser like Arnault! This shows the importance, for him, of this negotiation. The agreement finally reached provides that Guinness will increase its stake in Jacques Rober from 40 to 45% and will have a seat on the LVMH board. A masterstroke: Arnault secures an additional 5% of his financing without losing an ounce of his power."

"How did the man who was, only five years earlier, an obscure CEO of a small company manage, with an initial stake of 40 million francs, to become the CEO and main shareholder of the leading French luxury company? To attack LVMH and acquire 28% of its capital, Financière Agache put more than 21 billion francs on the table!"

"Henry Racamier, on the other hand, had made an excellent deal. As soon as he saw the stock prices soaring, he sold at the highest point (4,720 francs) 80,000 LVMH shares he held, which brought him 350 million francs. In fact, Racamier indirectly sold his shares to Arnault! It was a clever stock market move since, after the raid, the share price would drop just above 3,000 francs. However, these positions perfectly reflect the attitudes of both men: Racamier is a dilettante, while Arnault, even at that time, was only motivated by the pursuit of power, no matter the cost. The importance of money would come later."

"For the CEO, cascading has a major advantage: it allows for absolute power with a small fraction of the capital. As the owner of company A, I control 51% of company B, which controls 51% of company C, which in turn... "With only three successive holdings, one can have power over the company at the bottom of the structure by committing capital equal to about 13% of the net asset," wrote Jean Peyrelevade in the magazine Banque in 1985. The current president of Crédit Lyonnais, who was then chairman of UAP, denounced the ill effects of "capitalism without capital," which gives power to executives who are not accountable to anyone. He is now a particularly discreet director of LVMH. For the king of cascades, there is still a catch: when dividends flow upstream, they are divided by two at each level in the opposite direction! As for minority partners, it is hard to see the advantages they gain from tying themselves up like this, unless they believe that the horse they hitch themselves to will outclass all others and allow them to grow rich alongside it."

"Arnault proceeded with a capital increase of 7.3 billion for Dior to finance the contribution of LVMH shares. Of this amount, 4 billion were injected by Boussac Saint-Frères, which controlled Dior 100%, 2 billion came immediately from the sale of Peaudouce, and the remaining 2 billion were to be obtained through a later operation that Arnault was not yet willing to reveal. Regardless, the Arnault group ensured that it retained 58% of Dior. This allowed them to raise 3.3 billion on the market, offering 42% of Dior's capital, particularly to French and foreign institutional investors. Bernard Arnault thus completed his financing without losing control of his fashion house, which itself owned the LVMH shares."

"rnault saw potential in Christian Dior, a more attractive company within his group. He believed that he could better convince investors by showcasing the store on Avenue Montaigne. However, there was a problem: Dior was indeed a magical, universally known name, but it was a small business with only 600 million in revenue and 50 million in profits. It was valued at 1 billion at most, which was far from the 7 billion needed. Undeterred, Arnault decided to inflate Dior's value with Jacques Rober's stake in LVMH. As a result, the fashion house became a holding company valued at over 8 billion. For the first time, the prestige of a brand, transformed into a holding company, was used to attract investors."

"LVMH. Bernard Arnault is infuriated by this move. Seeing the head of a subsidiary (even if he is the second-largest shareholder of the group) act in this way is a transgression of all the rules of capitalism, compounded by a personal affront, on which he cannot compromise. The chairman of the LVMH management board will therefore initiate a legal process to remove Racamier from Louis Vuitton by calling for an immediate general meeting of the company. Intoxicated by victory and blinded by resentment, Bernard Arnault has not had the patience to wait a few months for the ordinary general meeting scheduled for June 1989, during which he could have easily dethroned the old man. Instead, his criminal proceedings will only delay the deadline! Arnault has indeed fallen into a trap. He has no other choice but to convene a general meeting to dissolve the management board he has just appointed, himself!"

"Arnault will therefore use the third solution, that of cascading. This involves stacking control companies on top of each other and opening their capital to minority shareholders who wish to be associated with the presumed success. These can be anonymous small investors or clearly identified external partners. He had already practiced this in 1986 when he had to pay cash for the last Willot shares. To find the 400 million francs, he sold a portion of the capital of Arnault et Associés, the former Férinel, his holding company, to Crédit Lyonnais and Duménil-Leblé. The following year, he raised funds by listing 13% of Conforama on the stock market. He brought Guinness in at 40%, then 45%, within Jacques Rober, the shell that now holds the LVMH shares. Of course, the sales are always partial. Bernard Arnault's golden rule is to always retain, under any circumstances, 51% of the capital of his companies to ensure he maintains control."

"For the first time, LVMH is calling on Kroll Associates, an American research firm specializing in economic intelligence. The mission is to uncover Racamier's secrets. However, the results are not up to par, and time is running out."

"In mid-February 1999, Pierre Godé and James Lieber, the group's attorney for sensitive affairs, met with Nicolas Waldmann in Paris, accompanied by Thomas Helsby, the head of Kroll Associates' London office. The objective of the meeting was to launch an investigation into Gucci as well as its two main leaders, Domenico De Sole and Tom Ford. A letter from Kroll, addressed to the leaders of LVMH, dated February 16th, was clear: "Your group currently holds a significant stake in a foreign company," Nicolas Waldmann wrote to Pierre Godé."

"On the pretext that this affair was embarrassing for the reputation of the company (and for that of Lazard), but vital for its independence. But when the COB opened its investigation into LVMH in early 1989, it came across evidence that the placement of OBSAs in France, with friendly hands and not dispersed abroad, was premeditated: a convention linked the institutional investors."

"He is tasked with touring ministerial offices to instill poison, to show that the new CEO of LVMH's career has many gray areas and that he acts too often on the edge of legality. Cleverly, he also reminds people that Bernard Arnault never returns the favor, which is the worst thing a politician can hear."

"Similarly, Kroll was commissioned by LVMH to obtain information on other competitors, such as Hermès, Versace, Ferragamo, or Armani. Regarding Domenico De Sole, the investigations that Kroll is conducting at the request of LVMH go far beyond9."

""Can we sue a company and ally ourselves with one of its competitors while sitting on its management bodies? No." Jean Couten proposes to immediately exclude André Battestini, Jean-Paul Parayre, and the two censors, representatives of Vuitton, from the LVMH supervisory board and replace them with a Hennessy and a Moët-et-Chandon. Arnault, at the podium, says nothing, but everyone understands that the initiative comes from him."

"LVMH operates as an aggregate of large SMEs, led by another SME, with the speed of decision and personalization of choices that this implies. This is the main key to LVMH's success and the enrichment of its main shareholder, which is perfectly legitimate in this respect."

"After a gradual increase in power, according to our information, he would have taken nearly 90% of the stock options distributed by LVMH in 1994 for himself. That's 500,000 shares at the time, which have become 3 million shares today9. This represents a gain of 1.5 billion francs in 1994, which would have been renewed in the following years, but for smaller amounts."

"Alexandre de Lur Saluces and his lawyers quickly realize that LVMH's leaders know everything about them, their strengths, their weaknesses, including their private lives."

"Bernard Arnault did not buy this great wine to make money but as a personal investment in one of the jewels of French national heritage, a symbol of perfection. A bit like buying a work of art with no direct return expected. Only the grumpy will say that in this case, he could have paid for Château-d'Yquem himself and not have it purchased by LVMH."

"The report first analyzes the internal sales of Christian Lacroix and Céline. Christian Lacroix lost money every year from 1988 to 1998. Initially belonging to Financière Agache and La Belle Jardinière, mostly owned by Bernard Arnault, the company became the property of Louis Vuitton from 1993 onwards, which bought this loss-making machine for 80 million francs. "Subsequently, from 1993 to 1998, Louis Vuitton supported Christian Lacroix's losses for a total amount of 270 million francs," says the report, which continues: "The Christian Lacroix operation results in a profit for BSF, a company owned by Mr. Bernard Arnault, through various holdings, to the detriment of minority shareholders of LVMH, a listed company, all for an amount of around 300 million francs.""

"What does he say? He starts with the following observation: Bernard Arnault initially controls LVMH through a cascade of companies. If they were all merged, his final stake would be reduced to 3.6%. "Following various sales and acquisitions of companies, the stakes will change significantly and allow Mr. Bernard Arnault to increase his interest percentage from around 3% in 1988 to 19% in 1998," writes Antoine Gaudino: thus [...] the value of Mr. Bernard Arnault's stake in LVMH has considerably increased over the past ten years, as it has gone from 1.5 to 22 billion francs.""

"On April 29, 1994, the Christian Dior and LVMH shares were sold by Guinness to Financière Agache for 11.7 billion francs, while their stock market value that day was 16.911 billion, representing a loss of more than 5 billion for Guinness! In reality, this loss is only apparent. Guinness received 3.7 billion in cash but also 34% of Moët-Hennessy, until then a 100% subsidiary of LVMH, with an estimated value of 8 billion francs. However, this stake was also "obtained at a significantly undervalued price," asserts the Gaudino report, which, in the absence of accounting documents, establishes an evaluation of Moët-Hennessy by comparing the operating results with those of LVMH and its stock market value. From these calculations, it appears that Guinness benefited from an undervaluation of the price of Moët-Hennessy shares for a total amount of 7 billion francs. "This loss was clearly incurred to the detriment of the minority shareholders of LVMH, who held the sold Moët-Hennessy shares." In other words, by selling its LVMH and Christian Dior shares to Financière Agache below their price on the one hand and, on the other hand, by acquiring LVMH shares of Moët-Hennessy, also undervalued, Guinness would have made a neutral operation, but would have massively enriched Bernard Arnault (shareholder of Financière Agache). This contested operation led to the almost doubling of Christian Dior's interest percentage in LVMH, which rose from 24% to 40.75%."

"Could it be by the operation of the Holy Spirit that Bernard Arnault's fortune was multiplied by 200 in ten years? If not, how did he get rich? Pierre Godé's explanation is brief: Bernard Arnault, he says, "made personal operations above LVMH" and "bought shares directly". But where did the money come from? Are the sophisticated structures of the Arnault galaxy in the nineties as clear as Godé claims? Or are they as dark as Gaudino writes?"

"This is one of Arnault's strengths: when the LVMH3 stock falls, when investors doubt, he takes advantage of it to strengthen his personal positions at a good price. And he doesn't hide his game, at least not his optimism about short-term recovery capabilities. In this year 1998, despite the plunge in its stock price, despite the crisis, Bernard Arnault displays his confidence. And he cannot stand to be challenged."

""It is a victory of common sense for the benefit of all shareholders," says George Bull. "In business, one must not be stubborn," acknowledges Bernard Arnault. And he adds that his "pragmatism" led him to choose a "third way." LVMH ends up with 11% of the future Diageo, which it had previously contested. And it will receive another £ 250 million (€ 380 million) in the form of superdividends after their merger. In total, LVMH will receive 5 billion francs, which will allow it to reduce its debt, which reached 29 billion francs (€ 4.42 billion) in 1997."

"This is the moment that Bernard Arnault chose for Vuitton to buy out its minority shareholders2. This operation allowed BM Holding, 100% owned by the Compagnie Financière du Nord, and therefore by Bernard Arnault, to pocket 1.8 billion francs, which would allow him to strengthen his control over LVMH."

"Like other luxury companies, LVMH has worked several times with Kroll, officially to track down counterfeits or parallel sales worldwide, and evaluate all means to put an end to them; or to monitor distribution networks, local agents and verify that they do not carry out operations for their own account."

"But most importantly, on that same day, Domenico De Sole pulled an incredible rabbit out of his hat. Gucci announced the immediate issuance of 20 million new shares, exclusively reserved for employees, which reduced LVMH's stake from 34.4% to 25.6%! Called ESOP (Employee Stock Ownership Plan), this "employee share ownership plan" is a diabolical invention that uses the inexhaustible resources of Dutch corporate law to prevent LVMH from imposing its views without taking majority control of Gucci. Michel Zaoui, head of mergers and acquisitions in Europe for Morgan Stanley (the advisory bank for Guinness against Bernard Arnault), came up with the idea."

"While François Pinault's offices on Boulevard de La Tour-Maubourg (in the former LVMH headquarters) have become a hive of activity, while Kroll is supposed to be monitoring Ford and De Sole like a shadow and reporting everything that is happening at Gucci, Bernard Arnault, for once, knows nothing, is not informed about anything, and has no suspicions. On March 18, he participates in a meeting with financial analysts, during which he reaffirms that he has no intention of launching a takeover bid for the entire capital of Gucci and is completely optimistic about the outcome of his operation."

"Bernard Arnault, La Passion créative, entretiens avec Yves Messarovitch, Plon, 2000. Nadège Forestier et Nazanine Ravaï, Bernard Arnault ou le goût du pouvoir, Olivier Orban, 1990. Pierre-Angel Gay et Caroline Monnot, François Pinault milliardaire, les secrets d’une incroyable fortune, Balland, 1999. Sara Gay Forden, The House of Gucci, a Sensational Story of Murder, Madness, Glamour and Greed, HarperCollins, 2000. Christine Kerdellant, Les Nouveaux Condottieres, dix capitalistes des années Mitterrand, Calmann-Lévy, 1992. Patrick Lamm, Enquête sur l’affaire Boussac, Robert Laffont, 1985. Alexandre de Lur Saluces, La Morale d’Yquem, entretiens avec Jean-Paul Kauffmann, Grasset-Mollat, 1999. Stéphane Marchand, Les Guerres du luxe, Fayard, 2001. Jean-Marie Messier, Mon vrai journal, Balland, 2002. Michel Pinçon et Monique Pinçon-Charlot, Nouveaux patrons, nouvelles dynasties, Calmann-Lévy, 1999. Gisèle Prévost, Voyage au pays du luxe, Le Cherche Midi, 2001. Jean-Michel Quatrepoint, Histoire secrète des dossiers noirs de la gauche, Alain Moreau, 1986. Nazanine Ravaï, La République des vanités, petits et grands secrets du capitalisme français, Grasset, 1997. Hugh Sebag-Montefiore, King of the catwalks, LVMH affair, Chapmans, 1992. Olivier Toscer, Argent public, fortunes privées, Denoël, 2002. Claude Vincent et Philippe Monnin, Guerre du luxe, l’affaire LVMH, François Bourin, 1990."

"This is what happened with Yves Saint Laurent. Pinault had been tempted by luxury diversification for a long time, and the Sanofi Beauté file had been presented to him. After studying it in 1998, he decides not to pursue it, deeming the price too high and, most importantly, lacking the right person to turn the business around. After spending a day at sea in Saint-Tropez on a boat rented by Arnault in July, Pinault makes his decision. He calls the boss of LVMH: "I have decided not to pursue it. I don't have the right people, but you do. I wanted to inform you, Bernard, so that you can do what you want." "François, thank you for letting me know," Arnault responds. This is how LVMH was able to conduct its exclusive negotiation with Sanofi, only to break it off at the last moment. The same thing happened with Château Cheval-Blanc. This first-classed growth of Bordeaux is for sale. All the major potential buyers have, of course, been contacted: Arnault, who controls Château-d'Yquem, Pinault, who owns Château-Latour, as well as Albert Frère, the biggest Belgian fortune, Liliane Bettencourt,"

"Interestingly, it is not LVMH that is launching a public offer to buy back the remaining 3% that it does not control, but rather Louis Vuitton is buying back its own shares... to destroy them. This is a clever, and fiscally advantageous way to charge the cost of this buyback, which amounts to 2.1 billion francs, to Louis Vuitton rather than LVMH."

"Time is running out. Domenico De Sole and Michel Zaoui from Morgan Stanley know how fragile the more or less fictitious allocation of shares to employees is, which reduces LVMH's stake in Gucci from 34.4% to 25.6%."

"says: I spoke with Dehecq. We're in agreement. Your business interests me. Excellent. When would you like to begin negotiations, and with whom? And what is your starting position? I won't negotiate the price, payment terms, or other details. You just need to take the sale protocol signed with LVMH before its withdrawal and change the names. I have only one condition: the deal must be finalized and signed before 9 a.m. tomorrow. The banker is astonished: But that's not possible: it's 5 o'clock in the afternoon! I'm sorry, but this condition is non-negotiable. Change the names? Nothing is ever that simple. The Lazard team will work through the night, along with lawyers from both parties who will nibble on lukewarm pizzas. Patricia Barbizet will go to sleep from 3 a.m. to 5 a.m. during the drafting of the agreement proposal, which she will come back to discuss and then validate."

"In March, the acquisition of 33.3% of Tanneur & Cie, which manufactures leather goods for major brands and also under its own label, is formalized, as is the acquisition of the Italian company Pucci, led by the founder Emilio Pucci's daughter. Marquise Laudomia Pucci di Barsento will continue to be in charge of creation, LVMH promises. In May, Bernard Arnault announces the acquisition of Omas, an Italian company that manufactures high-end pens. "The equivalent of Montblanc," explains Bernard Arnault... whose Italian leaning continues to grow!"

""I like to build," says De Sole. "Me too," replies Pinault, who suggests transforming Gucci into a multi-brand luxury company, like LVMH. The two men shake hands. The deal is sealed, although there are still many things to be settled, in terms of price and legal protection of the independence promised to Gucci."

"The same approach was taken with Krug champagne, which was put up for sale by Rémy Cointreau, then pressured by its banks. In early 1999, Pinault studied the file to see if, with Château-Latour, entering the champagne market made sense. He believes it doesn't. Again, he calls Arnault and tells him: "You're alone, Bernard, the way is clear." This time, Arnault only thanks him half-heartedly. And on January 21, 1999, LVMH announces the purchase of Krug champagne for 1 billion francs."

"In the New York Times, Robert Duffy, CEO of Marc Jacobs, states: "My wish is for LVMH to invest the money in us and develop our brand." Christian Lacroix adds: "Mr. Arnault is great, but he far prefers going to battle than promoting a brand he has already conquered.""

"In addition to the official war, there is also a secret war. While they are battling, for now in vain, on the legal front, mobilizing international lawyers, LVMH's leaders will also resort to other methods to discredit their opponent. They will again use the services of Kroll Associates, but this time on a massive scale. The goal is no longer to quickly obtain usable information to identify the weaknesses of a target and better negotiate, but to extensively, widely, and deeply gather a considerable amount of information and documents on François Pinault. Once collected and analyzed, they will be provided to LVMH's top management. This vast intelligence operation will be carried out along two lines of work. On the one hand, documentary investigation, using databases, public archives, and confidential interviews with all kinds of people, including officials and journalists, allowing them to develop analyses, memos, and seek new leads. On the other hand, operational research, essentially trash digging, called black forests (forêts noires) in the terminology used in Anglo-Saxon agencies, carried out by a third-party English company. At no point in any of the documents we have been able to consult is there any trace of clearly illegal activities, such as unauthorized wiretaps, document theft in private premises, or home invasion."

"This failure has little consequence, as in July, LVMH publishes its half-year results, which suggest a record-breaking year. Internal growth and store openings are behind a 40% increase in sales. This figure even reaches 68% in the United States, partly due to the rise of the dollar against the euro. The group praises the success of Sephora, which has multiplied store openings, and DFS, whose turnover has grown by 31%. But it is Louis Vuitton that leads the way with a 50% increase. LVMH's share price reaches its peak: the general meeting decides to split it by five so that at less than 100 euros per unit, it is once again accessible to very small portfolios."

"How is it that LVMH did not appear during the threshold declarations at the time of the wave of Bouygues share purchases in 1999? Already, its presence was masked by a sleight of hand. In December 1999, LVMH loaned to Financière Agache, another head company owned 100% by Groupe Arnault, the 3.11% of Bouygues acquired that year. "When LVMH, a listed company and star of the CAC 40, crossed the 5% threshold in Bouygues, there was no declaration because its shares were assimilated to those of Groupe Arnault, which indirectly controls LVMH and had already crossed this threshold," write Les Échos. As a result, LVMH did not appear in the notice of the Financial Markets Council mentioning, at the end of 1999, the crossing of the 10% threshold of Bouygues' capital by Groupe Arnault."

"To anyone who will listen, Antoine Bernheim always diligently extols the merits of Bernard Arnault, but he cannot hide his bitterness. Since Arnault reached the heights of success and since Bernheim himself was semi-retired due to the clan struggles that tear Lazard apart, Arnault no longer asks him for advice or even gives him a friendly nod. Although he is the vice-president of LVMH, he no longer participates in the gala dinners organized by Arnault. He is no longer invited to Saint-Tropez in the summer. "Gratitude is a disease of dogs that is not transmissible to humans," the old lion sometimes tells his interlocutors, adding: "The only way to maintain good relations with Bernard Arnault is to stay away. You should not be indebted to him.""

"At that time, like LVMH, the world was basking in the euphoria of growth that no one could imagine ending. In trading rooms, people began to believe again that trees could grow to the sky, and they took as proof the fact that they had already made a good part of the journey. Investors abandoned their bonds to buy start-ups from acne-ridden kids who only produced losses and sold for a fortune."

"while Bernard Arnault had let it be known that he himself had bought the Bouygues shares through his personal companies (at the top of the cascade), it will appear that LVMH (at the bottom of the cascade) participated massively in the operation."

"Once renegotiated down to 60 million dollars, this contract demonstrates the ease with which the top and bottom of the cascade can sometimes become mixed, where Bernard Arnault is alone and where he is only the leader of a large and diverse group of shareholders who have invested their money in LVMH and have no interest in MP3. LVMH's minority shareholders are entitled to wonder about the relevance of placing 864 million francs (131.7 million euros) of advertising on a website for their company, if not to enhance the investment of its main shareholder on a personal basis. In any case, there is a contradiction, since on one hand Bernard Arnault's interest was for MP3 to continue, while on the other hand LVMH's interest was for it to go bankrupt as quickly as possible, in order to put an end to this costly advertising contract. The total risk of this operation amounts to 1.5 billion francs (228.7 million euros), broken down into 630 million francs in latent losses and 864 million francs in advertising commitments..."

"Antoine Bernheim, still a board member and vice president of LVMH. To the former managing partner of Lazard who provided him with the financial means for his ambitions, built his credibility in the business microcosm and in the political world, and helped him throughout his rise, he devotes only a few lines. However, the dedication of the book he sends to him is full of praise: on the entire front page, he writes that without him, he would be nothing and that his gratitude is total. Bernheim will thank him, adding, however, that he would have preferred to read this piece of glory in the body of the book rather than in the dedication1919..."

"office. He looked tired. “OK. This is the deal. He wants a discount for being the lead investor.’ This seemed fair enough. LVMH was a prestigious name whose support would guarantee our reputation in the market. Tellio wanted a 10 per cent stake for $3.8 million, instead of the $5 million we were asking. More importantly, he wanted a 25 per cent discount for investing in the next funding round. This meant that if boo’s pre-money valuation was $100 million, LVMH could buy shares at a level of $75 million. Tellio had us. He knew that Benetton wasn’t ready to sign yet. And he knew we were running out of time."

"investment. Over the next few days more offers came in from existing shareholders, including Bernard Amault of LVMH and 21Investimenti. The fact that we hadn’t increased our valuation was obviously seen as an opportunity too good to be missed regardless of our launch problems. It was a chance for investors to buy more shares, at the same cost, rather than having to pay a higher price as they would have expected in a new funding round. When all the offers were counted, they added up to $23 million — much more than we needed. In the allocation of shares that followed, Nader as our newest investor was scaled down to $4 million. I hoped he wouldn’t mind too much."

"first reactions soon arrived. At around 10 a.m., I gota call from Jean- Bernard Tellio of LVMH. He was in New York and wanted to meet for lunch. _ Kajsa and I found him in the downstairs restaurant at Barneys. ‘Did you see the article?’ I asked. He nodded cautiously. “Yes. There’s a bit of a problem.’ “What kind of problem?’ ‘Our PR people don’t like the headline,’ he said. He paused for a moment before continuing. “What I should probably have made clear to you is that LVMH isn’t technically an investor in boo.’ I grinned, assuming this was a joke. But his expression didn’t change. ‘The investment in boo was made with Bernard Arnault’s personal money, he went on. ‘It was his private company — Markas Holdings.’ ; This was news to us. We thought we had been dealing with LVMH from the start. Even Tellio’s business card had LVMH written on it. ‘It’s not that we don’t like the article,’ Tellio went on. ‘It’s great. But just try to play down the LVMH bit next time.’"

"Listing the number of brands that have ended up in French hands becomes a painful count for those who care about the entrepreneurial future of our country: Gucci, Brioni, Pomellato, and Bottega Veneta are owned by Kering di François Pinault, the archrival of Arnault, who recently also targeted Valentino, acquiring 30% with the option to buy the rest of the shares in the coming years. Bulgari, Loro Piana, Fendi, Acqua di Parma, Emilio Pucci are the Italian brands in the LVMH portfolio, which recently also bought a stake in the holding company of Remo Ruffini that controls Moncler."

""Luxury is really meant to fill the deep-rooted insecurity of the new rich," said Solca, quoted in an article by Bloomberg Business Week dedicated to the emperor of the sector, "the cashmere wolf", Mister LVMH Bernard Arnault."

"Any resemblance to characters who have existed is not coincidental. These characters all really existed. This story is the history of the most significant financial and industrial disaster of the post-war era. The anecdotal style and the "comic book" aspect of the story should not make us forget the devastating waves of factory closures and layoffs, nor the company personnel who were the victims plunged into anxiety and insecurity. The necessary transformation of the textile industry could not occur without suffering. It has allowed the birth of other destinies, carriers of creativity and values that the world envies us for."

"Chapter 8 "...to throw a rope to the founder of a business to keep him out of the water until his suffocated company can be retrieved, indeed all these battles of shields won constitute the high politics of money. Certainly, for the banker, as for the conqueror, there are risks; but there are so few people in a position to wage such battles that the sheep have nothing to do with it.""

"As reported by Patrick Lamm, in his book, Investigation into the Boussac Affair: "Attacked from the right by financial circles and from the left by the leftists of Libé, René Mayer has gotten himself into a fine mess."

"Reviving Boussac in this context was an almost impossible bet to maintain."

"This is finally accepted. "The State often only has the choice between two bad solutions, it must then choose the least bad," writes Alain Boublil in his book, Le Soulèvement du Sérail."

"In his book, Investigation on the Boussac Affair, Patrick Lamm estimates the cash obtained thanks to the "generosity" of the commercial court at 600 million francs."

"> "The board of directors is one of the most distinguished ways of wasting time." August Detœuf speaking of O. L. Barenton, confectioner"

""Success is never final, failure is never fatal: it's the courage that counts..." Winston Churchill"

""A sin confessed is half forgiven..." Popular saying"

"Bernard Arnault and the Willot brothers know each other, no more... Apart from their appetite for business and professional curiosity, they have nothing in common. Bernard Arnault is very athletic, a music lover and a confirmed pianist, demonstrating great artistic sensitivity."

"> "History, by repeating the causes of greatness and decline of everything on earth, could warn man of the moment when he should halt the play of all his faculties; but neither the conquerors, nor the actors, nor the women, nor the authors heed its salutary call [...]. May this history be the poem of bourgeois vicissitudes to which no voice has thought, as they seem devoid of greatness, while they are equally immense [...]." Honoré de Balzac, History of the Greatness and Decline of César Birotteau"

"He has behind him a brilliant career. He was notably president of Sud Aviation and, in this capacity, nicknamed the father of the Caravelle."

"Antoine is more convinced than ever that happiness lies in industry, investment, and innovation. But the industry is a mistress that comes at a high cost. Textiles and apparel, increasingly competitive, continue their descent into hell."

"It is also the first time that a group has committed to presenting an economic balance sheet, that is, by proceeding with a revaluation of its real estate assets to give an updated value to its consolidated assets. When questioned by a journalist, Jean-Pierre Willot clarified: "I attach more importance to the economic balance sheet than to the accounting balance sheet in which assets are valued in 1950 francs as if they were in today's francs."

"Thus, in 1975, the group took over Cyclone Establishments, specialized in the manufacture of sportswear and raincoats. These establishments employ 970 workers located in four factories in Fougères, Avranches, Louvigné-du-Désert, and Dol-de-Bretagne. This operation also included the acquisition, for a symbolic franc, of Couturier Establishments in Fécamp, also specialized in ready-to-wear clothing."

"After being appointed president of CBSF, Bernard Arnault takes over the coveted presidency of Christian Dior on March 20, 1985."

"Among the proposed files is Conforama. It represents a great opportunity to move away from clothing and textiles, and to expand into the distribution of goods for home equipment. This chain of stores, driven by a purchasing center, Conforama France, was founded in 1967. It aims to be the leading distributor of home comfort, including appliances."

"The formula succeeds beyond all expectations. In four years, the company has repaid its concordat, absorbed about ten affiliates, and opened new stores (including the one at Pont-Neuf, in the Belle Jardinière building). The company becomes profitable again, distributes a dividend after having rebuilt its equity."

"Immediately after the war, in 1947, he created his own fashion house with Christian Dior. From the moment of his first collection, presented in February 1947, his "flower women" who embody the New Look, toured the world. Under the management of his manager, Jacques Rouet, Dior becomes an essential star of French luxury. Manufacturing licenses for all kinds of fashion accessories are sold worldwide."

"In 1977, the opportunity arises to acquire Galeries Anspach, a poorly controlled chain of stores whose activity is chronically unprofitable. Between 1971 and 1976, the world's leading distributor, the American group Sears Roebuck of Chicago, failed to improve its profitability."

"Its concept is innovative compared to the spirit and organization of the traditional furniture store. The sales areas, averaging 2,000 square meters, offer a significant choice for customers. A strong storage capacity allows the establishment of the principle of takeaway sales, whereas previously one had to order furniture without being able to have it immediately. The chain, through its purchasing power, has considerable negotiation capacity."

"What was done... Without this animal episode, the Louis Vuitton Foundation would probably never have seen the light of day at the Jardin d'Acclimatation because Bernard Arnault would inherit this concession when he took over the Boussac Saint Frères group."

"serrée qui a lieu à leur siège de Chilly-Mazarin, les frères Willot emportent le morceau au nez et à la barbe de la Banque de Paris et des Pays-Bas qui pensait enlever la mise grâce à son aura et à ses moyen"

"Moreover, in his usual manner, Jean-Pierre Willot engages in a tough negotiation with Korvette's suppliers to obtain payment terms. In vain, they refuse to deliver unless they are paid in cash. Due to the drastic reduction in its sales areas, Korvette's no longer has the purchasing power it once had."

"Retrenched in his ivory tower, unwilling to delegate a single shred of his power, Marcel Boussac gradually loses his best collaborators and contact with the reality of the world around him. With the liberalization of international trade, the loss of captive markets linked to the decolonization process, vertical integration, which was once a strength, becomes a handicap. Vertical integration implies intermediate inventories at each stage of production."

"Marcel Boussac is a perfectionist. To produce quality, his factories must be equipped with the best materials to be among the most productive."

"A great specialist in industrial organization, Henri Fayol will be his general manager and mentor, the only one of his collaborators he would sometimes listen to."

"The carving up will begin very quickly. To have current cash flow and satisfy the most privileged creditors, the judicial administrator finalizes the sale of L'Aurore and Paris-Turf, as well as the building on Rue de Richelieu, headquarters of the press group. The Fresnay-le-Buffard stud farm and the racing stable in the colors of Marcel Boussac, with his champion, Acamas, are sold to Aga Khan."

"Staff join Boussac as if entering a religion. At that time, one was born, lived, and died for textiles. The group's employees are "bagged." They are taken care of from the cradle to the grave."

"On May 24, 1978, Marcel Boussac writes a letter to the banks and public authorities, to indicate that he is ready to make new sacrifices on his personal assets and to establish a new management team that would have the confidence of the shareholders. As a last resort, he had brought in a "providential man," Jacques Petit, former manager of Prisunic and then of Manufrance, who could only assess the damage."

"His racing stable wins the most coveted grand prizes. His stud farms are the largest in the world. The sale of his yearlings and broodmares brings him a great deal of money."

"In the 1950s, the Boussac group is at its peak, generating 750 million francs in revenue and employing more than 25,000 people in 65 factories."

"In this month of August 1978, the brothers and their collaborators work tirelessly on the elements of the Boussac file that the judicial representatives have kindly given them. Antoine Willot visits all the factories at lightning speed. The accounts of the various companies are audited by the firm Jacques Vigne. The group's real estate assets are identified and valued. All this work leaves little time for summer vacations... A takeover offer is made by the brothers through letters dated 3, 9, and 17 August."

"The Boussac group declines very rapidly. Marcel Boussac covers the month-end expenses from his personal funds. Bank loans are renewed thanks to the guarantees he provides on his exceptional properties."

"The "Boussac quality" certainly has a price, but that price is no longer in the market. The rise of fashion also hastens the fall. Boussac's "indestructible" products are made to last. Rapid changes in fashion outdated them and make them unsellable, further inflating the stock. The group does not have the flexibility needed to adapt to the new pace of collections. Operating losses accumulate. Cash flow is drained. Banks are reluctant to finance overdrafts and investments despite the personal guarantees that the patriarch commits to give."

"The Boussac episode was merely a breath of fresh air. This operation also had the advantage of refurbishing the brothers' image and eliminating a competitor who was undercutting market prices."

"- preserve and increase the prestige of Christian Dior, ensure a coherence of its development policy with that of Parfums Christian Dior, and bring together within a single company the legal entities that compose it, the French and foreign business funds, trademark registrations, and the buildings on avenue Montaigne."

"Jean-Pierre Willot and his brother Antoine, resigned, can only accept them. First, a buyer must be found for Dior. Then, it is necessary to realize, within two months, 100 million francs of divestments. The sale of the shares of Compagnie de Navigation Mixte for 37 million francs, acquired piecemeal by Jean-Pierre Willot, and the execution of a lease-back operation on the Boussac headquarters on rue Poissonnière for 64 million should enable this to be achieved."

"It thus clearly appears that the Willot group benefits from extraordinarily favorable conditions in this operation. Not only does it not have to spend a cent in taking over Boussac, but on the contrary, it improves its cash flow through the recovery of receivables and liquidity and by selling Boussac's stock. A new working capital is established thanks to the supplier credit that the group can negotiate again. The sales of assets already made will allow for the repayment of the first installments."

"La stratégie générale des dirigeants s’apparente à ce que l’on appelle parfois la fuite en avant, qui consiste à résoudre les problèmes par des coups."

"When they discover Christian Dior, the Willot brothers are very discreet. They tread on the carpet of the offices on Avenue Montaigne on tiptoes and dare not show themselves too much in the workshops located on the upper floors... They especially do not want to disrupt this fine cash-producing machine and will only make a discreet appearance at the avenue Montaigne store. Jean-Pierre admiringly contemplates the cash flow from this fine conquest."

"As of June 30, 1980, the financial statement of the new Boussac Saint Frères company shows a profit of 14 million francs, after 83 million francs in depreciation, but this result is achieved thanks to 68 million in exceptional capital gains realized on the sale of assets."

"The Agache-Willot group indeed had, with its retail subsidiaries, Conforama and Le Bon Marché, its real estate companies: Belle Jardinière, its industrial real estate, its 4,500 homes, and its exceptional properties such as the Mivoisin estate, a considerable asset base generating significant income and free of mortgages. Indeed, 70% of the capital of the Conforama and Dior companies had been pledged to the banks since August 1980, but the direct competitors of the group, like DMC or the Prouvost group, are in an economic and financial situation that is hardly more brilliant without having such a considerable mass of assets."

"In accordance with the agreement taken with public authorities, the group has thoroughly overhauled Dior's legal structure. This entity was split into multiple companies that owned the brand, another owned the business assets, and others owned the business assets and licenses depending on the continent."

"In 1979, Dior's turnover reached 274 million francs, up nearly 14% on the previous year. The net profit amounts to 22.7 million francs. The turnover achieved indirectly through licenses is 1,247 million francs, up 22% compared to 1978. The growth margins for Dior are considerable. Its activity abroad has developed significantly."

"It is in the garment activity that the slope is the hardest to climb. Interviewed by Le Point (issue of January 26, 1981), Jean-Pierre and Antoine Willot explain: "The Blainville factory (Blizzand raincoats and sportswear), a former flagship of the Boussac group, is the very example of the laxity that has settled in: instead of manufacturing products based on market trends... it served as an outlet for upstream manufactured products. This single factory accounted for a third of the group’s garment activity losses."

"Sleep tight, good people... "Good fellows, these Willots," headlines the Liberté du Nord. Le Matin of January 21, not to be outdone, writes: "How can one not admire, indeed, a group that storms companies, suddenly announces massive layoffs, juggles billions, and wants its brand image to no longer resemble that of the big bad wolf...""

"The group, in a lengthy statement, denies the harmful allegations contained in this report and threatens to sue Syndex for defamation. We are a month away from the elections, all this media turmoil remains as it is and does not favor the group's credibility. In the first quarter of 1981, losses continue to accumulate. The group's debt keeps increasing. Interest rates reach peaks at 17%. Financial expenses represent nearly 9% of Boussac Saint Frères’ revenue. On the side of public authorities, the case becomes explosive. In this pre-electoral context, the group obtains a deferment of payment of its social charges and VAT. The settlement of the latter by guaranteed obligations corresponds only to a treasury facility available from August 24."

"On May 10, 1981, the outcome is announced, François Mitterrand is elected president of the Republic. The socialists are going to come to power... For the brothers, it’s consternation... Jean-Pierre Willot, who always has one move ahead on the chessboard, but not always at the right time, imagines a way out for himself. The solution is to spin off the industrial activities, by creating seven autonomous entities: hygiene, flax, household linens, fabrics and apparel, sports and leisure, packaging, engineering and mechanics. This spin-off allows to separate "the wheat from the chaff.""

"Advertising sells. The proceeds from the sale exceed all expectations and bring in more than 10 million francs, barely a month of the losses generated by BSF.... This episode, extensively commented on in the press, will contribute to maintaining a despicable image of the brothers, financiers with the demeanor of beasts, scattering a luxurious jumble, without conscience or scruple, just as they announce the elimination of nearly a thousand jobs."

"On the legal front, the parties involved in the case discovered that contrary to what everyone thought, the brothers, who were believed to be completely overwhelmed by the treatments they had been subjected to, were not out of the game. Yet, nothing can be concluded without their agreement to sell their 42% stake in SFFAW. Their shares have double voting rights. Furthermore, control of the group is also reinforced by the titles held by Le Peigné de Malines and by la Belle Jardinière. As of June 1982, to lift this mortgage, Master Chassagnon negotiated a first agreement with the Willot brothers. According to this agreement, the industrial development institute would buy their participation for 64 million francs. It is also provided that the buyer would bear "the possible amount of all commercial or civil sentences, regardless of the jurisdiction that would pronounce them, that could be issued against Messrs. Willot, following liability trials of any kind in which they would be involved and definitively condemned, particularly on the occasion of transferring capital from profitable companies to deficit companies." Furthermore, it is stipulated that the buyers take care of tax adjustments, late payment interests, and penalties imposed on the brothers. In return, they completely disappear from circulation. What more could the people ask for... Unfortunately, Dominique de La Martinière wraps himself in his dignity as a senior official and former director general of taxes, and particularly considers that taking on possible convictions is an unacceptable financial and moral risk for his institution. Seeing that time is on their side, the brothers, far from backing down, raise their heads."

"The empire slowly crumbles. Bernard Willot, the eldest and the "wise" of the siblings, courageous but not reckless, and who has already stepped back, requests at the age of 57 to supplement his rights to a well-deserved retirement. Régis Willot, who suffers from heart problems, significantly distances himself from running the group."

"Furthermore, the conditions under which the parent company was remunerated for the services provided to its subsidiaries, as well as the remunerations for guarantees given as security, have been profoundly overhauled."

"Apart from the petty political considerations mentioned above, two main reasons can explain the brothers' descent into hell. The decision to acquire Galeries Anspach and especially Korvettes was a huge strategic error."

"However, the invited journalists and personalities leave with the idea that the Agache-Willot group is not just a vast financial Monopoly and that, behind the obscure prejudices spread in public opinion, there are indeed factories, staff serving machines, and manufacturing products. The main subsidiaries and central services are managed by competent and motivated executives."

"Hit hard by this insurmountable competition, apparel manufacturers are asking the government to declare a "state of crisis" and to renegotiate the Multifiber Agreement, pleading with the EEC to revise the bilateral agreements that opened borders too quickly to low-cost products. Nearly 30,000 jobs have been lost in four years, about 13,000 in 1980 alone."

"Moreover, to ensure that the brothers cannot return to the head of their group, the government has passed the following provision in article 21-1 of the law of September 15, 1981: "When it considers that the survival of the company requires it, the court, upon the request of the public prosecutor or on its own motion, may, by a reasoned decision, notified to the parties, condition the approval of any concordat in advance on the replacement of one or more corporate officers.""

"Quickly, a witch-hunt atmosphere is established around the brothers and the responsible executives of the group. The brothers are followed day and night by police cars. They must surrender their passports and driving licenses to the judicial authorities. They are prohibited from leaving the country. Both their headquarters and their homes are thoroughly searched by Customs. Customs also has a list of forty executives, potentially suspected of complicity, in case they cross the borders with compromising documents or valuables."

"However, to use the words of Jacques Delors, "there is no question of accepting, in the principles to be implemented, the nationalization of losses and the privatization of profits," the state cannot indefinitely subsidize doomed businesses and for that, he proposes a thorough reform, both in letter and spirit, of the bankruptcy law."

"Gérard Bélorgey thinks that the Company does not have the means to continue and develop its activities in the field of clothing (except shirts) which is too subject to the vagaries of fashion and without being able to control its own distribution. We must continue to divest non-strategic activities such as carpets, ropes, or fishing nets. He advocates a refocus on the upstream branches: apparel and furnishing fabrics, plastic packaging, flax, hygiene products, and household linens. For him, it is still too early to bring partners into the profitable business sectors."

""Boussac Saint Frères will live," "Stop the destruction," "the Willot must pay"... can be read on the banners held up by delegates and trade unionists and by about 500 employees from all the factories of the group at the meeting of the central works council held in Wambrechies on July 2."

"As Alain Boublil explains in his book The Uprising of the Seraglio: "This disagreement stemmed from a misunderstanding. Dominique de La Martinière thought he would have authority over René Mayer, as a majority shareholder does over his CEO. But that was not the contract made between the State and René Mayer. " Dominique de La Martinière intends to keep control and demands to have the majority on the Company's board of directors. But René Mayer intends to govern with confidante personalities... A tug of war begins. The head of IDI, the majority shareholder, throws his hat into the ring and wins the bet. Of the twelve board directors, eight will be appointed from within the IDI circle including Jean-Pierre Lacour and Jean-Paul Elkann."

"The distribution subsidiaries held by SFFAW, Au Bon Marché, La Belle Jardinière, and Conforama, which are profitable and not under judicial settlement, continue on their own path. The crown jewel, Christian Dior, a subsidiary of BSF, is already the object of all covetousness. There is talk of taking it public along with Conforama."

"Pierre Mauroy, while visiting Poitiers, stated to the press: "Business leaders whose difficulties originate from dishonesty or incompetence will be treated with rigor." Textile industrialists find these remarks outrageous. "Who will decide whether a business leader is competent or not..." wonder the bosses from the North, who interpret the Prime Minister's words as an explicit threat."

"Now, the machine needs to be started again. The factories are no longer supplied. The suppliers only want to deliver if they are paid in cash. The transporters exercise their right of retention on the goods they have in deposit and which they have to deliver. They only agree to release them to supply the factories on the condition of being paid."

"On December 22, 1981, he received a mission letter containing these directives and orientations:. "Following the study conducted by SADEF, the government is committed to finding a swift solution for the Agache-Willot group that preserves the main activities and the maximum number of jobs. Consequently, I ask you to lead and conduct, in conjunction with financial partners, the operations that will lead to the takeover of the assets necessary for the rebuilding of the group while replenishing the equity, so that, in a second phase, a solution can be provided to the creditors' issue in connection with the judicial administrators. Simultaneously with the takeover, I wish that you establish a new executive management that will have the necessary means for reconstruction, particularly based on the results of the current discussions with the employees. On the industrial front, you will strive to strengthen the core textile and clothing sector and to develop those peripheral activities, particularly commercial ones, that complement this main activity. Industrialists will be involved, according to modalities you will propose, in the recovery and redeployment of activities depending on the quality of their contribution from an industrial, commercial, financial, and social perspective. Finally, you will establish structures suitable for quickly ensuring the necessary diversifications, where new activities need to be created to maintain employment"..."

"This company will be established with a capital of 200 million francs. Its new corporate name will be Compagnie Boussac Saint Frères. Starting from July 1, 1982, it will receive from the provisional administrator the lease management of Boussac Saint Frères for a period of five years. In financial terms, the inventory will be brought in at a value of 1.1 billion francs and the realizable and available assets for 500 million francs, all payable at the end of the five years. The royalty to be paid to BSF by CBSF will be 0.10% of the tax-excluded turnover."

"For René Mayer, the return to profitability first requires maximizing the use of production tools. But to sell quantities, prices must be slashed and often sales are made at a loss. Gérard Bélorgey notes in his memoirs: "At his first meeting with the executives, he is pleased that sheet sales have doubled. We lose 2 francs for every meter sold..." Instead of announcing a return to profits, the increase in turnover is publicized. This dumping infuriates competitors who cry scandal. The subsidies granted to Boussac result in completely distorting competition in the market, particularly in the areas of upholstery fabrics and household linens."

"understand that they can get a better deal from the liberal tide. ". Indeed, time works for them. The trials they have initiated against the lease management contract and its implementing acts delay all proposals for solutions in their case. The liabilities of companies under judicial settlement are frozen. The resolution of bad businesses, Korvettes and Galeries Anspach, is now behind them. Additionally, the solvent subsidiaries: Confo-rama, Au Bon Marché, la Belle Jardinière and especially Christian Dior significantly improve their performance and increase their value accordingly."

"But a president was needed... Many industry captains approached recused themselves given the enormity of the task and the political context of the case. After many court intrigues, it was finally a self-made polytechnic, René Mayer, former director of the National Geographic Institute, who was chosen. He is confronted with immediate financial challenges he had never known, nor even imagined."

"A committee is set up with the support of the real estate service, which can offer adapted conditions for the provision of industrial buildings with the approval of trustees, these assets belonging to the mass of creditors. It's a hunt for buyers. Gérard Le Gai scouts in all directions to find serious and solvent purchasers... The deal is tempting. You can set up a small business for nothing with some extra money."

"The real estate service of the group scouts as much as it can to divest the very diverse assets that make up the non-operational heritage: land, workers' houses, head offices, factory buildings, warehouses... Those that cannot be sold are rented out. The Mivoisin estate, a flagship of this heritage, must be returned to profitability in order to be sold. It consists of 3,600 hectares spread across agricultural land, forests, and hunting grounds. A pleasure property must be turned into a profitable operation. The staff is reduced from 80 to 20 people. To combine utility with pleasure, under the impulse of René Mayer, the castle is also used by the group as a seminar center."

"It's a perpetual balancing act... and shuttling back and forth between Lille and Paris is also necessary.. To win hearts, the new president shows himself to be very socially open... Presenting himself to the company's central committee as the son of a worker that he is, he announces to the unions and staff representatives, "I'm not saying there won't be layoffs, but I am saying there won't be people thrown out onto the streets." And he adds, "when I leave, there will be more of you than there are today." The statement hits home. It will be long remembered."

"The need for cash flow continues to grow, and the president's star continues to fade...""

"They continue their legal guerrilla warfare. They first appeal the December 1983 ruling of the Lille Commercial Court, which had pronounced the confusion of assets of BSF and SFFAW. Then, in June 1984, they request the outright cancellation of the agreement signed a year earlier with René Mayer, on the grounds, in particular, that they did not receive the positions they had been promised and that the financial situation of the Boussac Saint Frères Company had significantly deteriorated and no longer allows for the presentation of a proposal for concordat."

"The windfall effect attracts the vultures. Unfortunately, later on, Gérard Le Gai, to demonstrate his effectiveness and by facilitating these business takeovers by "professionals," fraudsters specializing in asset stripping, will participate in mishaps, which will earn him a conviction for complicity to severe penalties."

"The first procedure concerns the appeal that the Willot brothers had filed against a judgment delivered on December 23, 1983, which declared the merger of assets between BSF and SFFAW. This decision was part of the conditions for the implementation of the July 1983 agreement between the Willot brothers and René Mayer. Having not been applied, these agreements are now the subject of another annulment procedure initiated by the Willot brothers before the Lille commercial court, which was to take place on October 12, 1984, with a judgment to be delivered in November. Finally, the brothers will not pursue their appeal for various reasons: it does not contradict their position regarding agreements with CBSF, it has no impact on the criminal proceedings they face for misappropriation of corporate assets, it opens the way to a concordat solution, and finally, would reduce the liabilities to be repaid from 3.1 to 2.7 billion francs."

"To avoid futile competition, mergers with groups like DMC could have been concluded."

"On this occasion, the company publishes a very detailed information document on what it calls: "1984, the state of play.""

"The restructuring work continues with, in particular, the sale of the Cyclone factory in Fougères in the same month of July. Specialized in the production of raincoats and sportswear, this unit was losing 25 million francs a year for a turnover of 135 million. It is sold to the international Cotonnière under very favorable conditions for the buyer who guarantees the maintenance of 300 jobs. Unfortunately, this operation will subsequently lead to embezzlements that will result in heavy sentences for their perpetrators."

"It is true that nearly one billion francs were consumed in just over two years: one third in investments, one third in restructuring costs, and the rest in working capital needs and operating losses. However, turnover has increased by 36.5% in current francs, particularly thanks to the extremely rapid development of the hygiene business. The restructuring effort was considerable. In two years, the number of industrial sites was reduced from 97 to 75, thanks to disposals or closures of establishments. At the same time, the workforce decreased from 20,260 employees in May 1982 to 15,974 in August 1984, ending at 14,990 by the end of December 1984. During the same period, 328 million in investments were made. The "baby" has become much more presentable to interest investors and to enable them to complete the enormous grooming that has just been carried out at the taxpayer's expense... At the top of the Company, the wind is turning. During the preparation of the 1985 budget, a deep disagreement appears between the chairman and his CEO."

"In a dramatic turn, it is learned in the meantime that Bernard Arnault, CEO of Ferinel, signed an agreement with the brothers on November 14, subject to the cancellation of the previous commitments with CBSF. This new agreement provides a scheme relatively identical to the previous one. Bernard Arnault acquires 20% of the brothers' stake in SFFAW for 32.5 million francs, payable in seven years, interest-free. The remaining 80% are subject to a loan for use which provides him the benefit of a usufruct. The signatory is advised by Dreyfus Bank which has committed to assemble a group of investors likely to contribute 400 million francs in the capital increase of SFFAW."

"• - The Ferinel group, with a turnover of one billion, a major real estate group from the North, specialized in leisure real estate and in the construction of individual houses. Bernard Arnault is already ahead thanks to the agreement that has just been signed with the brothers; • - The Prouvost group, with a turnover of 7 billion, led by Christian Derveloy, the leading European wool group, which benefits from the support of Georges Plescoff, who has already worked on this file at the request of IDI; • - The Bidermann group, with a turnover of 3.4 billion, led by Georges Jollès, who was, it must be remembered, for more than three months, the general manager of CBSF and who therefore knows the dossier perfectly; • - Bernard Tapie, with a turnover of 4 billion, who lets it be known that he is also a candidate to take over the business and announces having the support of banks and investors to close a round of funding, thanks especially to an Arab businessman and American banks."

"Bibliography Four major works Michel BATTIAU, One of the consequences of the restructuring of the textile industry: the birth of the Agache-Willot group, Lille, CERES Nord-Pas-de-Calais. Gérard BÉLORGEY, About Boussac, Memoirs and lessons, 2 vols. Conference given at the Cambacérès Circle, published by Calaméo. Archives available at the National Foundation of Political Sciences. Benoît BOUSSEMART and Jean-Claude Rabier, The Agache-Willot File. A capitalism against the current, Paris, Presses de la Fondation nationale des Sciences politiques, 1983. Patrick LAMM, Investigation on the Boussac affair, Paris, Robert Laffont, 1985. Other information sources Bernard Arnault, The Creative Passion. Interviews with Messarovitch, Paris, Plon, 2000. Michel BATTIAU, The Textile Industries of the Nord-Pas-de-Calais region, Paris, Librairie Honoré Champion, 1976. Alain BOUBLIL, The Uprising of the Seraglio, Paris, Albin Michel, 1990. Dominique COCHART-COSTE and Jean-Paul GRUMETZ, Saint Frères. Paternalism and its memories, Amiens, CEFRESS-Université de Picardie-Jules-Verne, 2007. Jean-Dominique Delaveau, I am Marcel Boussac and I hunt in Mivoisin, Dammary-sur-Loing, Interstices and Editions de l’Écluse, 2009. François Faraut, The History of La Belle Jardinière, Paris, Belin, 1987. Nadège Forestier and Nazanine Pavai, Bernard Arnault, or the Taste for Power, Paris, Olivier Orban, 1990. Christine Kerdellant, The New Condottieri, Paris, Calmann-Lévy, 1992. Marie-France Pochna, Good Morning Mr. Boussac, Paris, Robert Laffont, 1980. Pierre Pouchain, The Masters of the North. From the 19th e century to the present day, Paris, Perrin, 1998. Jean-Michel Quatrepoint, Secret History of the Black Files of the Left, Paris, Alain Moreau, 1987. Nazarine Ravai, The Republic of Vanities, Paris, Grasset, 1997. Airy Routier, The Exterminating Angel, Paris, Albin Michel, 2003."

""Whenever you see a successful business, tell yourself that it is because one day someone made a courageous decision." Peter Drucker"

"In 1984, SOPARI granted three current account advances: 180 million in March, 200 million in July, and 35 million in October. It is now time to find a private group capable of taking control of CBSF and SFFAW. The ground is being leveled to allow the entrance of the contenders, but nothing is decided yet as long as we do not know who holds the ownership of the SFFAW shares... The court date for the action to annul the agreements concluded between the brothers and CBSF is postponed to November 19 for a judgment that would be rendered on December 17, 1984."

"A new player has therefore just invited himself to the table of contenders. Bernard Arnault is indeed not known to the general public. He is a rather discreet character, raised in the tradition of the great families of the North. His father, Jean Arnault, leading the Roubaisien building and public works group, Ferret-Savinel, is a recognized and appreciated business leader by his peers."

"Bernard Arnault, after a brilliant academic career, succeeded in the competitive entrance exam for the Ecole des Mines but narrowly missed Polytechnique due to a fracture that handicapped him during the entrance exam."

"The refocused Ferinel group experiences rapid and fruitful development. This success encourages Bernard Arnault to find other playgrounds. He acquires Le Chasseur français which he will resell and which will earn him a dispute with Bernard Tapie. He attempts an incursion into fast food, without success. The arrival of the left in 1981 opened new horizons for him. Charmed by the idea of continuing to practice his profession in a broader and more open market, and discovering new ideas, he decided to go and establish a real estate development subsidiary in the United States himself."

"1-Financier: The Biography of André Meyer, A story of Money, Power, and the Reshaping of American Business, by Cary Reich, John Wiley & Sons Inc., 1983-1997. 2-The Master of Masters by Giancarlo Galli, Garzanti, 1995. 3-These gentlemen from Lazard, by Martine Orange, Albin Michel, 2006, p. 91. 4-Ibid., p. 138. 5-These gentlemen from Lazard, op. cit., p. 48. 6-Interview with Figaro on March 20, 2008; collected statements by Sophie Fay. 7-The New Economist from March 22, 1991, investigation by Hedwige Chevrillon. 8-Ibid. 9-The Festive Spirit, by Michel David-Weill, with journalist Patricia Boyer de Latour, Robert Laffont, 2007. 10-Interview with the author. 11-The festive spirit, op. cit. 12-Financier: The Biography of André Meyer, op. cit. 13-Luxury War, the LVMH Case, by Claude Vincent and Philippe Monnin, François Bourin Editions, 1990. 14-Interview in CB News magazine on June 9, 2008. 15-Quoted in the portrait of Antoine Bernheim by Sylvie Hattemer-Lefèvre, "Il Padrone," Challenges magazine dated September 27, 2007. 16-Interview with the author on June 30, 2008. 17-See Investigation into a Capitalist beyond all Suspicion, by Nathalie Raulin and Renaud Lecadre, Denoël, 2000, p. 111. 18-In the autumn of 2010, Antoine Bernheim will get his revenge by joining the supervisory board of the "new Monde" alongside BHL and Laure Adler, the former director of France Culture... "The entire 6th arrondissement," sighs a journalist from the daily newspaper. 19-"Bolloré faces his first setback", L'Expansion, July 10, 1993. 20-These gentlemen from Lazard, op. cit., p. 48. 21-Jacques, Brother of Jesus, by Pierre-Antoine Bernheim, Albin Michel, 2003, p. 120. 22-See The Holy Alliance. The True Story of the Vatican's Secret Services, by Eric Frattini, Flammarion, 2006. Page 344: "On the list of illustrious Freemasons of the Vatican compiled by the Vatican counterintelligence service, called Sodalitium Pianum (Association of Pie), are cardinals such as Augustin Bea, Sebastiano Baggio, Agostino Casaroli, Achille Liénart, archbishop of Lille (...) or Jean Villot, secretary of state to Pope Paul VI." The file on the "Masonic tentacles" in the Roman curia remained buried. 23-CEO of the insurance group Scor, holder of a degree in economics and graduate of HEC, Denis Kessler succeeded Renaud Denoix de Saint-Marc, member of the Constitutional Council, in January 2008. 24-See interview in L'Express on February 20, 2008. 25-The Ghettos of the Jet Set: How the Bourgeoisie Defends its Spaces, Seuil, 2007."

"In the case of Bernard Arnault, Groupe Arnault will control 85.6% of Financière Agache, which holds 98.6% of Bon Marché Holding, itself holding 58.9% of Christian Dior, a 100% shareholder of Financière Jean Goujon, the principal shareholder with a 42.5% stake in LVMH. Historically, this system of "poulies bretonnes" has sometimes been criticized for favoring opacity in the financial situation of the groups in question, with the debts of the parent companies often being "transformed" into equity in the entities located on lower levels."

""Yes, he obviously helped, especially on two important occasions: the takeover of Boussac in 1984, and then when LVMH was acquired in 1988. Antoine Bernheim immediately believed in Bernard Arnault. He was impressed by his audacity. It was necessary to assess the risk to determine whether it was fatal or not.""

""Vuitton has developed extraordinarily. It is a more successful brand than Gucci, and the Sephora retail chain is doing very well. However, Donna Karan (DKNY) has not been a good acquisition," laments the advisor in the shadows. Sometimes, he also regrets that the LVMH boss does not involve his executives more in the profits.""

"Armani has remained an independent white fly, along with a few other Italian brands, in a luxury world dominated by global leaders. The French of LVMH and Kering, the Swiss of Richemont have acquired dozens of Italian brands over the years. The fear is that, sooner or later, even Armani may be absorbed into a global group. King George denies it, even though in 2021 he opens up to the possibility of a financial partner."

"The COB has already pronounced on this point, declaring as early as January 10: "The triggering of the price maintenance procedure must occur when there is a change of control by means of a takeover bid or block sale, which is not the case at LVMH." It clarified: "No text prohibits stockpiling, even if stock market authorities are reflecting on this issue. 36""

"Certainly, on January 5 and 6, he launched a real raid on LVMH. In forty-eight hours, he picked up 870,000 shares, or 7.5% of the capital, propelling the share price to 4,720 francs. He thus secured the minority blocking vote, thanked former president Alain Chevalier, and sat in his CEO chair. But he navigated so well through the intricacies of the law that no one has so far concluded that there has been a change of control (in legal terms). This hypothesis would have obliged him to launch a takeover bid or to carry out a price maintenance, at a cost of around 30 billion francs."

"eight days, he will become the CEO of LVMH22, the most prestigious luxury group, which recently welcomed one of the rising stars of the finance world, Bernard Arnault, with great fanfare at the beginning of the summer."

"As for the change of control of LVMH, Arnault feels completely safe. He no longer runs the risk of being forced to launch a takeover bid. Since Férinel, he has taken the greatest precautions every time he undertakes an operation. This "procedural" talent almost always spares him."

"For the first time, Bernard Arnault has encountered a real obstacle in his path: the resistance of Henry Racamier. Until now, the president of LVMH has always believed that to solve a problem, it was enough to concentrate, work harder than others and find the flaw that leads to the solution. In this month of March, he realizes that Henry Racamier is probably a much more formidable opponent than he had thought. Because the old man never gives up, worse, he gives the impression of giving in to better counter-attack. He likes to fight, for him it's a game, and this game confuses"

"They justify themselves to a few close ones. In the strictest confidence: they must ensure the perpetuity of the ancestral companies. Bernard Arnault says he wants to make LVMH the largest luxury group. Perhaps the challenge is worth trying. The families are aware of their limited room for maneuver. All they want is to have peace as before."

"Mrs. Piniot recalls that Moët's management had committed to placing the warrants with foreign investors. However, she notes that more than two-thirds of the issued warrants were placed with French institutional investors who agreed to hold them for a certain period of time. These included the Caisse des dépôts et consignations, the Caisse nationale du Crédit Agricole, Crédit Lyonnais, BNP, and UAP. A memorandum of understanding was even considered to formalize this commitment. It was only signed by UAP. Therefore, Mrs. Piniot concludes that there was a "misuse of procedure harmful to minority shareholders." Even more serious, she emphasizes that Bernard Arnault was perfectly aware of this irregularity when he entered the capital of LVMH. When the head of Dior abandoned his takeover bid and opted for a less aggressive solution, Lazard bank assigned one of its partners, David Dautresme, to recover the maximum number of warrants and "negotiate the conditions of their transfer." The operations were carried out through a Luxembourg intermediary, Belmavobel International Securities. Thanks to these negotiations, Arnault obtained nearly 94% of the issued warrants, which ensured him nearly 12% of LVMH's capital."

"To continue his momentum, he needs money. Before going on vacation, he reorganized part of his empire according to a well-established technique for raising capital: the placement of Dior's capital. Until then, Dior Couture was 100% owned by Boussac Saint-Frères. He transformed it into a financial holding company, brought his stake in LVMH and offered it to private investors."

"So, at 5 am, he concludes an agreement. Anthony Tennant obtains a seat on the new board of directors of LVMH and increases his stake in "Jacques Rober" to 45%. Concession, says Bernard Arnault. Joke, comment the detractors of the young wolf who quip, "Arnault has found 45% of his financing." But Arnault retains what is crucial for him, the exit"

"The technique, although complex, is perfectly mastered. This is the fourth time he has used it: one year before, he introduced Conforama on the second market, then the holding company Arnault and Associates, of which the family kept only 60%. He has just placed 42% of Dior's capital with private investors to raise 3.3 billion francs, which allowed him to continue buying LVMH shares. The principle is simple: 1. He buys companies; 2. He improves them; 3. He can then raise capital to make new acquisitions."

"On the eve of autumn, Anthony Tennant is embarrassed. Certainly, the agreements of July 8 have allowed him to strengthen his positions in LVMH and especially in Moët-Hennessy, to which he is linked by a vital distribution agreement. But is the alliance with Bernard Arnault really reliable? Two nights (July 6 and 7) were too short to give birth to "Jacques Rober". The terms of the contract seem increasingly ambiguous as the days go by. Wasn't the Briton naive? And he remembers a banker's joke: "Jacques Rober is JR, the villainous hero of the Dallas series." For Bernard Arnault, the agreements are clear: the two parties are associated for at least three years within Jacques Rober, with 60% for Bernard Arnault and 40% for Guinness, with the aim of acquiring 30% of LVMH, except for "unforeseen circumstances". Each party agrees not to buy outside the joint structure without prior consultation. In other words, it is possible to pick up shares provided that one's partner has been informed, but without waiting for their response. The Briton is worried. Aren't there two possible interpretations? Can't Arnault buy more easily than Guinness? What is an "unforeseen circumstance"? What will happen beyond the 30% threshold? And above all, if Guinness wants to sell its stakes before the three-year deadline, it will only be compensated for 80% of the value of its shares. The terms of the "largely interpretive" agreement reduce Anthony Tennant's room for maneuver."

"One can well imagine their first conversation on the phone, one morning in early May: “Would you be interested in a stake in LVMH, Henry Racamier must have said, somewhat condescendingly.” “It would be a great honor, Bernard Arnault certainly replied in the tone of the greatest deference.” When the young boss of Dior hangs up, his smile is carnivorous. "I won," he probably thinks, before inviting his top executives to lunch. Bernard Arnault does not warn Antoine Bernheim. It is still premature. Lazard is already engaged with Chevalier. So he turns to Crédit Lyonnais for the occasion. A first meeting is scheduled with Henry Racamier's banker at the Dior headquarters."

"On Wednesday, October 26th, Bernard Arnault chose the general assembly of his flagship company (Financière Agache) to announce his plans: now that he holds a blocking minority in LVMH, he will restructure his distribution group (Bon Marché, Belle Jardinière, Conforama) inherited from Boussac around a clear organizational chart with the goal of raising capital. The plan: Bon Marché becomes the parent company of Conforama, of which it will own 86.5% of the capital, and strengthens its stake in Belle Jardinière to 75.7%. At the end of the operation (see table 2), the whole group will combine a large real estate capital (about 100,000 square meters for Bon Marché alone) with a significant distribution force. It will represent nearly 300 million francs in net profits in 1988 for a turnover of over 7 billion francs. This structure will allow Bernard Arnault to appeal to the market under good conditions. He plans to proceed with a capital increase of 2.4 billion francs, which will be reinvested in Christian Dior."

"In this autumn of 1987, Bernard Arnault's attack plan is ready. His springboard will be Dior, his aircraft carrier, Crédit Lyonnais, his fighter jets, Lazard, and his various companies will serve as ammunition. As for his objective, it will be LVMH."

"When Henry Racamier introduced Bernard Arnault to the representatives of Moët and Hennessy on June 30th, he was obviously unaware of the negotiations between the president of Dior and Chevalier and Guinness. The families were also unaware. The president of Vuitton presented his takeover project which angered the families. They saw it as a betrayal from within, when they had feared an outside raider. They would never forgive him for this and asked Henry Racamier to leave the room. Frédéric Chandon de Briailles and Alain de Pracomtal then drew Bernard Arnault's attention to the dangers of a takeover: "Not only can another group attack us, but our best collaborators may leave us," they told him. Arnault acknowledged the argument. Alain de Pracomtal continued: "Would you see any inconvenience in associating with Guinness, with whom the group has committed itself?" Bernard Arnault was too happy to answer no. In exchange for this agreement that suited him, he asked for a right of first refusal on the shares of the Moët and Hennessy families, that is, on 13% of the capital. And he obtained it. The agreement will be signed at Lazard at the end of July. It does not have the unanimity of the approximately 200 members of the families. About fifteen young "reformers", especially among the Hennessys, think they are being forced. In any case, from now on, they are all linked: if they want to sell their shares, they are required to offer them first to Bernard Arnault. His strategy is starting to pay off. Bernard Arnault has managed to rally everyone to his side in... less than a week. First Racamier, who still relies on him to oust Chevalier. Then Chevalier, who is convinced he has found the necessary support in him to neutralize Racamier. Just like the families, who are now condemned to play with him. Finally Guinness, who has obtained a seat at LVMH thanks to him. A clever move. Everyone thinks they owe him something. No one yet suspects the young man's true intentions. "They will not be able to compromise my plans," he must speculate. He knows he has only strengths in his hand."

"Returned to the hands of a private buyer, the Agache-Willot group would give birth to the flagship of the global luxury industry: LVMH."

"It is estimated that the conditions of the acquisition of the Boussac group allowed to generate cash and capital gains amounting to 800 million francs, but with a heap of losses to absorb."

"But he is not yet out of trouble. He also needs to terminate the employment contracts that had been extended to the brothers. Considering that they have been dismissed, they demand their severance pay. After some complications, Bernard Arnault will have to comply with their request. This time, the saloon doors close for good. Lucky Luke has permanently sent the Daltons back to their ranches."

"Now the task is to make the industrial part of the group profitable and finish "slimming down the mammoth," which is no small feat."

"From their golden retirement, beyond the ruins and also the nuggets of their lost empire, they witnessed the emergence of a new major boss and the creation of the first global luxury group. They were the originators of another destiny."

"In this world of French textiles, very dispersed and inward-looking, the "Willot machine" acted like a sort of boa constrictor that would swallow entire swaths of industries, to return only restructured factories, stripped of their surplus jobs and their non-operational assets that had been of no use until then. It’s a kind of recycling, done with the financial means at hand. These operations worry actors and observers because of their scale and setups, but public authorities eventually come to see them as a natural phenomenon, often useful, or at worst, a necessary evil. The Willot brothers will not have been just "quacksalvagers of lame ducks"."

"The acquisition of new businesses then becomes a means of survival and not as an end in a strategy of external growth."

"Thus, to allow normal operation of BSF, relying only on credit, especially with interest rates of at least 12%, was not enough to compensate for the chronic weakness of equity and results. The temptation was then great to buy other businesses in trouble to have, at liquidation values, inventories or client accounts that generate cash and immediate capital gains. The takeover of Boussac illustrates well this opportunity of means provided by a kind of headlong rush."

"A simple law governs the functioning of the industrial machine: the need to have sufficient equity to finance inventory and work-in-progress, customer accounts, and investments, a condition essential for its sustainability. This equity can be usefully supplemented by recourse to supplier credit and medium and long term loans. Equity could also have been found by increasing the capital of already listed group companies or by introducing profitable subsidiaries or activities on the stock market. But their lack of profitability did not allow it, and the brothers preferred to remain masters in their own house."

"Bernard Arnault can thus perfect his control over the group and definitively sideline the brothers. It is thus the historic banker, Crédit Lyonnais, that intervenes at a time when, ironically, its president, Jean Deflassieux, is about to hand over his seat to Jean-Maxime Lévêque. A person well-acquainted with the case..."

"The Willot brothers have left the business scene for more than thirty years now. Generations born at the end of the thirty glorious years probably do not even know their name. And yet their feats of arms, at the time, largely made headlines and deserve to be told. This is the subject of the book by Hervé Maupin, who participated as an actor with them in the structuring of the sclerotic sector of the textile industry caught off guard by too rapid opening of borders. Originating from the middle bourgeoisie of the North, at the head of a modest family business, the Willot brothers will, through force of energy, common sense, and ingenuity, overturn an industrial world trapped in past splendors. Their methods and physical appearance made them favored targets of journalists and caricaturists. Very soon, they were nicknamed the "Daltons." Daring and conquering, they cheerfully trampled on the turf of the establishment. Their binge of acquisitions, a real headlong rush, eventually caused them to bite the dust. The economic and social stakes they represented with the arrival of the Left in power in 1981 led to a pseudo-nationalization of their industrial activities."

"After this operation and some purchases on the stock market, his holding company now owns 36% of the capital, which, together with the self-controlled shares and those held by Peigné de Malines (a subsidiary of SFFAW) and Belle Jardinière, gives him an absolute majority."

"It took three years of investigation, 3,000 pages of expert reports, 10,000 pages of files, and 60 hours of hearings to examine the facts charged against the Willot brothers. The mountain gave birth to a mouse... One expected the discovery of dubious practices such as: fund transfers and opening of personal accounts abroad, excessive representation expenses, unjustified cash withdrawals, etc. From an international letter of request launched by the investigating authorities, the court hoped to extract some exotic charge, like tax haven, in vain. From an account opened by Galeries Anspach at Kayser Ullmann bank, three bank domiciliations were allegedly created in Panama. They apparently have nothing to do with the ongoing case. None of that, therefore. But to be thorough and to sow doubt, during the pleadings, the prosecution submitted new documents concerning these accounts and requested that they be examined during a final hearing scheduled for April 15... to find that these documents cannot in any case be retained in the procedure. The brothers do not display any ostentatious lifestyle."

"The planned workforce reductions are more significant: they are reduced from 15,640 to 11,228 in 1987, about a thousand more than in the Ferinel plan."

""From a small family business, the creation of an international conglomerate is based on a number of simple but profitable ideas: • - choosing external growth by purchasing struggling companies at low prices that hold latent resources; • - diversification focused on the textile origin of the group and also the distribution sector; • - restructuring and making profitable the acquired companies through decentralized management and the search for productive niches; • - liquidation of dormant and unnecessary real estate assets. The originality of the system was to develop without any equity from the Willot brothers, by drawing the necessary financial resources for this expansion from the internal resources of affiliated companies... and thus the Willot brothers increased their personal fortune by increasing the value of their stakes, their dividends channeled by SFFAW and the salaries they allocated to themselves in the various subsidiaries.""

"Bernard Arnault's strengthened participation in the Agache-Willot group will be housed in his new family holding, Arnault et Associés, in which Crédit Lyonnais will find its place along with other renowned investors."

"The press seizes the event and comments: "It’s the little guy who wants to devour the giant," or as Libération headlines: "The frog swallows the ox.""

"Finally, for the detriment of Dior, the seizing by BSF of a part of the capital gains realized on the sale of the SCI owning the Dior buildings on Avenue Montaigne as well as the issuance of two checks of 1,500,000 and 1,200,000 francs intended for a fund transfer to the United States for Korvettes."

"They were also creators and investors. The entire hygiene sector and the Peaudouce and Nana brands were created from scratch by Antoine Willot. This activity allowed for the conversion of a number of textile factories, which would have inevitably been doomed to close. At the time of the brothers' departure, the hygiene business accounted for nearly 40% of BSF's revenue and, thanks to its profitability, Bernard Arnault was able to sell it in 1988 for 1.7 billion francs to a Swedish group... But the financial resources needed to implement their policy were severely lacking."

""For the unions, the role of the 'providential' textile operator, Julien Charlier, remains unclear. How will relations with DMC, the competing group he leads, be organized? A joint statement was published on December 18 by Mr. Arnault and Mr. Mayer, to announce and comment on the event: "...The intention expressed from the beginning by the public authorities was to create favorable conditions for the reintegration of industrial activities within a group destined to develop within the private sector framework. The interest shown by several industrial and financial groups in the takeover demonstrated that this objective had been achieved thanks to the action led over the past three years by CBSF, with the support of the public authorities."

"Without executive powers, the brothers seek to monetize their stake. They are approached by Worms Bank, already a shareholder with 10% and wishing to increase its stake. Fair players, they inform Bernard Arnault who also wishes to consolidate his relative majority. Under equal conditions, they agree to give preference to the latter. A negotiation meeting takes place on a Sunday at the office of the chairman Letartre. All four brothers are present, along with two of their wives. A fierce negotiation begins. The brothers value their stake at 600 million francs, equivalent to a value of 1,140 francs per share. Bernard Arnault chokes and stands firm on the figure of 250 francs which they had accepted during the sale of the first 20%. After long hours of discussion, the parties reach an agreement on the price of 760 francs per share, subject to the confirmation of support from Crédit Lyonnais to finance the operation and guarantee the sellers of the payment of the part of the settlement payable over time. The amount of the acquisition is to be paid over three years. Their stake is thus valued at 400 million francs. The four brothers sign the transfer slips for their shares. Confirmation of support from Crédit Lyonnais cannot be given until the following Monday evening at the earliest. The signed deeds and documents are entrusted to Michel Liagre, who will implement them only after receiving and verifying the commitments from Crédit Lyonnais."

"It's the prospect of endless litigation and the government wants the file cleared of any judicial proceedings. Bernard Arnault has the advantage of having dealt with them and ensured that they are definitely excluded from their business in exchange for a lucrative compensation."

"Bernard Arnault is, of course, questioned about his relations with the Willot brothers in the context of the agreements he has signed. He replies unequivocally that he is in no way the "front man" for the brothers. Contrary to the agreements signed with René Mayer, none of them will have any managerial power. Dior will not be sold to finance the concordat deadlines. The agreement signed is irreversible, the Willot brothers have signed the transfer slips of their titles. The workforce will be reduced from 15,640 to 12,252 without layoffs. He emphasizes the quality of the investors who will participate in the takeover operation alongside him. The direct and deliberate nature of his answers impresses the union representatives, who nevertheless remain very wary."

"For Bernard Arnault, in life, everything can be learned. This initial deficit will quickly be compensated by the arrival of a new management team that will implement modern management methods based on decentralized management by objectives and direct motivation of managers to their results."

"Bernard Arnault feels the tide turning and pulls a last ace from his sleeve to clinch the deal. His lack of knowledge in the textile industry is undeniably the weak point of his proposal. Julien Charlier, president of OMC, whom he has already met, can change the game if he agrees to be his advisor. An agreement is quickly reached. OMC becomes the textile industrial operator for BSF. An agreement is rapidly signed. Moreover, it is beneficial for both parties as it can help resolve competition issues between the two groups, specifically regarding household linens and clothing and furnishing fabrics. It is more than attractive for OMC, which will receive a royalty of 0.75% of the revenue from the textile activities under contract and will benefit from a right of first refusal and a 10% discount on the sale price of the concerned department."

"Between 1930 and 1939, he also buys, for a symbolic price, about fifteen textile factories "for scrap," foreshadowing the method used by the Willot brothers thirty years later... He completes his vertical integration by acquiring the Tremblot-Matheron and Rousseau Establishments, which operate about twenty clothing workshops, as well as the Wesserling Printing Manufacture."

"• He announces a takeover plan supported by a contribution of one and a half billion francs... excuse me for the little... Speaking of the Ferinel agreement, for him, this choice would betray "the nullity or complicity" of the State, and would amount to letting the group be dismantled to the benefit of an operator who only thinks of doing "real estate." He denounces the volatility of the brothers with the devastating slogan: "an agreement with the Willots is a weather agreement", while knowing that the solution to the BSF case must still go through them... For public authorities, the matter seems settled. They want things to move quickly. Gérard Bélorgey recounts: "One late November evening, on the snow-slush-covered highway between Lille and the coal mining district... I received a phone call from Matignon. Being the CEO of CBSF, and also the president of the subsidiary AUFINEC, which was central to the setup of the 1983 agreement with the Willots, and finally a signatory to various litigations we were forced into to clear the matter, I was indispensable. I was ordered to urgently go to Rue de Varenne to sign all necessary withdrawals so that the agreement sealed between the Willots and Bernard Arnault could be implemented..."

"Both, in their different capacities, were familiar with the Boussac Saint Frères case that Pierre Godé had already indicated to him as a possible target. François de Combret did not hesitate to encourage Bernard Arnault to approach Antoine Bernheim in Paris, who had in his drawers, among others, this business acquisition file to study. Politically, a new more liberal government had just been appointed. Investment banks have many business acquisition files rich in opportunities for those who know how to seize them."

"The brothers know that their case and their fate are no longer in the hands of the Élysée but Matignon, and that, as with other hot issues like steel, papermaking, the government wants to clean house. In the absence of a solution, liquidation could not be excluded. With Bernard Arnault, they have the opportunity to come out on top, and then, maybe arrangements can be made... Thus, on November 14, 1984, an agreement is signed between the brothers and Bernard Arnault."

"The Boussac Saint Frères file is one of those. The quality and influence of the Christian Dior brand greatly impressed Bernard Arnault. He would really like to know more... He knows the brothers, who are also from the North, why not meet them? On July 15, 1984, a first meeting takes place in Croix, at Croquet, the name of Jean-Pierre Willot's lavish home. Who will outsmart whom? Bernard Arnault mostly talks about Dior, but it's all or nothing..."