Vuitton

"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."

"When, in January 1978, André Sacau joins Vuitton, the house has two shops, in Paris and Nice, and begins a franchise experiment in Munich. Immediately he realizes that things need to be done differently. Margins are made at retail, in stores. To make money, you need to own the shops. Vuitton, and this is an essential option, will never practice either licensing or franchising, but will develop a partnership policy in all countries by always maintaining control (51%)."

"competitors do: manufacture in France to guarantee exceptional quality and sell in the Far East. The recipe is good. In 1977, Vuitton had two stores, a hundred employees, 70 million francs in turnover, and 7 million in profits. A few years later (1984), it will be 1,217 people, 1.1 billion francs in turnover, and 197 million in profits, and much more thereafter."

"In fact, Alain Chevalier and Henry Racamier will only carry out one operation together, which will not succeed: the secret purchase of 10% of Hermès' capital through Crédit Lyonnais. A hostile operation that the president of Vuitton will carefully hide from Hermès' president, Jean-Louis Dumas. The veil will never be lifted, and Lyonnais will eventually resell this stake to the traditional bankers of the saddler."

"André Battestini remembers his first meeting with Arnault. The icy atmosphere of rue François-Ier contrasts with the warmth of the Vuitton offices. "Bernard Arnault knows how to charm when he needs to, but at first glance, he looks like a cold fish," he recalls. The boss of Dior had to redouble his amiabilities to secure the trust of his first allies. The meetings multiply in June in a secret location: Michel Piétrini's Parisian apartment in the eighth arrondissement. The strategy of concerted attack by both parties is developed."

"On September 15th, a statement from Financière Agache made it clear: Jacques Rober holds 32% of the capital. Considering the Obsa he possesses, his participation amounts to 37.4% after dilution, but more importantly, Bernard Arnault is approaching the blocking minority in voting rights, a blocking minority that until now only the Vuitton clan possessed."

"The president of Vuitton acknowledges his mistake. He was wrong about Bernard Arnault. He says he had a premonition: "When I signed the alliance pact with him in June 1988, I extended my hand to him. A rag. I had an animal reaction, thinking I was wrong. But it was done. After that, I rationalized." Today, he regrets Alain Chevalier, with whom, after all, the relationship could have been less difficult."

"After two and a half hours of pleading, Bernard Arnault vaguely senses that his opponents have gained an advantage. He wants to defend himself and takes the floor with a clear and confident voice to conclude: "It is impossible to manage this company with Mr. Racamier present." Visibly moved, the president of Vuitton responds: "The management of Vuitton, as demonstrated by its results, is valid. Mr. Arnault has the will to take power everywhere and immediately.""

"Vuitton's communication is therefore carefully organized. A three-tiered system. First, the son-in-law of the head of Vuitton, Jean-François Bentz, leads with his agency, Creative Business, the subsidiary of RSCG, a prestigious advertising campaign. Photos of distant lands, a mixture of exoticism and dream, link the name of Vuitton to the world of travel. Then, within the house, an integrated service, led by Guy de la Porte, is in contact with the artistic, feminine and economic press. Finally, outside, Michel Frois takes care of Henry Racamier's image."

"Such a change cannot be coincidental. Henry Racamier's rehabilitation is carefully orchestrated. He speaks little: an interview with AFP in February, another with Nouvel Observateur a month later; through carefully selected media; rather left-wing, he sends a clear message, always the same: he who built his company, Vuitton, is being kicked out by an unscrupulous financier. It is time to give some autonomy back to the various subsidiaries of the group, a luxury company like his cannot be managed like a wines and spirits company, Moët-Hennessy, whose products are sold in supermarkets."

"After all, as the head of Cartier, Alain-Dominique Perrin, likes to repeat, Vuitton is canvas on suitcases... To make it an object of dreams, it takes skillful and relentless policy. A prestigious advertising campaign, sponsored artistic evenings."

""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.""