How LVMH became the world’s biggest luxury seller A brief history of the French conglomerate led by Bernard Arnault

After weeks of talks and meetings, LVMH has finally bought last October Tiffany. The deal, the largest in its history, will allow the French group to increase its presence in the United States and to strengthen its position in high jewellery, integrating a portfolio that already includes other brands in the sector such as Bulgari, Chaumet, TAG Heuer and Hublot.  The retail chain made unforgettable by the film starring Audrey Hepburn Breakfast at Tiffany will give the company an increase in revenues, a figure already very high, which in 2018 reached 46.8 billion euros, about three times the 14 billion euros of Richemont and 13.7 billion euros of Kering, always its closest rival, in recent fiscal years. Sales grew by 10%, while the Ebit reached the threshold of 10 billion, with an increase of 21%. According to the analysts, even if the jewellery and watches department of LVHM provides only 9% of the turnover at this moment, it has a high margin of growth and with the purchase of Tiffany will double to 16%. Much of the credit for these excellent results are due to Bernard Arnault, Chairman and CEO of LVMH, who, with a far-sighted approach, realized that a brand of suitcases and one of the liquors could be turned into the core of a colossus world leader in luxury. 

Arnault's instinct has led him to be a "first mover" in many cases. He introduced ready-to-wear to an haute couture company by hiring Marc Jacobs at Louis Vuitton, allowing the designer to revolutionize the brand with his unique style and collaborations with contemporary artists such as Takashi Murakami. He also used the fashion show to sell high margin items such as perfumes or handbags and was one of the first foreign businessmen to invest in China at the start of Deng Xiaoping's market economy reforms, opening a Louis Vuitton store in Beijing in 1992. Actually, Asia is the place where LVMH has more shops than in the rest of the world: 1289 against 1153 Europeans (excluding France) and 783 in the United States. In an interview, the CEO revealed that part of LVMH's success "is this duality, timelessness and maximum modernity.

Following this philosophy, in recent years, LVMH has added, among others, to its portfolio: Fendi, Bulgari, the entire Christian Dior (before 2017 Groupe Arnault, which is the private holding company owned and controlled by Arnault, was the sole majority shareholder), J.W. Anderson, Rimowa, Stella McCartney and Fenty as part of a joint venture with Rihanna. The conglomerate's properties rose to 75, generating a turnover that in 2018 alone exceeded the record of 51 billion dollars and has increased its advertising spending by two billion euros over the last five years. According to Statista, the global corporate data platform, it went from 3,310 spent in 2013 to 5,52 in 2018. Despite its global success, the French empire already has other plans for the future. The first is to expand and consolidate its presence in the United States, as evidenced by its deal with Tiffany and the opening of a new LV manufacturing facility in Johnson County, Texas.