|LMVH CEO Bernard Arnault, Marc Jacobs, and former PM Tony Blair|
|Sec. State Clinton, B. Arnault and architect Frank Gehry|
Where else was Madame Secretary Clinton recently seen? How about noshing on some sumptuous appetizers along with French businessman Bernard Arnault, CEO and chairman of LVMH at the event honoring him. Arnault has proven he is a corporate citizen unlike any other, and was duly feted by the Woodrow Wilson International Center for Scholars receiving their “Corporate Citizen” award in DC. Who else was there to see Arnault receive his award?
The usual LVMH partners and admirers of course: Donna Karan, Marc Jacobs, Frank Gehry (architect to the new Louis Vuitton museum in Paris) and Diane von Furstenberg along with her hubs Barry Diller. Also in attendance were former Prime Minister Tony Blair, Senator Joseph Lieberman, and even President Obama met with Arnault prior to the event at the White House where they discussed globalization, fair trade, and job creation in the US.
It’s no mere coincidence that the power elite were there to praise him and pump his luxury paw (he counts among his personal friends, President Sarkozy, for whom he was a witness at his wedding ceremony). Indeed, Arnault’s is a powerful company with a global presence and more than 80,000 employees whom he thanked during his speech. Besides being gracious, Arnault addressed the issue of a corporate citizenship (alluding to the Galianno anti-Semitic scandal?) based upon a moral code that was “nonnegotiable” and that could make tough decisions “regardless of the impact on our business.”
Bernard Arnault is an ardent globalist; he sees luxury and corporate value even in the remotest regions of the world, often before others would even consider building Wallmarts in these places, let alone a Louis Vuitton boutique. Starting in 1992, perspicacious LVMH began its push into China, and now Asia represents 35 percent of worldwide sales for the luxury holding company with more than 60 brands. There might be more than 333 LV stores in the world, but its flagship store is found in Shanghai. Likewise Bulgari, acquired by LVMH in March of this year, also has its largest flagship store in China. Even the subcontinent is getting in on the luxury expansion with India receiving its first store in 2003 (the first luxury brand store in country), and now Mongolia (yes, you read that right) also has its own LV store.
Arnault’s lingua franca has been his ability to draw from his business experience, circumnavigating the business world with aplomb, where LVMH now has more than 2,500 retail outlets. And, the “L” train keeps rolling along as L Capital, the investment arm for LVMH, is investing not only in luxe rival Hermes (almost 20 percent through a series of shrewd equity swaps), but they are extending the brand to resorts, skin care, and more precious gems and luxury bags. L Capital is investing in Japan, India, UK and the Middle East. Arnault clearly knows what he’s doing, with a track record of regular increased profits year-over-year, dealing with various forms of government (autocratic, democracies and as well as totalitarian states), and a personal net-worth that places him squarely as the richest man in Europe with a net worth of $41 billion.
Arnault continues to do two things that are of great importance to him: (1) he is not afraid to emphasize his French heritage and inculcate it into his worldview; and (2) he continues to explicate the paramount focus of the bottom-line of business as meritocracy. To the latter part, when the brands he owns (or creates) are not performing well, they are sold-off, e.g., the recent Christian Lacroix divestment. And to the first, Arnault has said that he wants to encourage unique aspects of French culture, seeing himself “as an ambassador of French heritage and French culture … what we create (at LVMH) is emblematic.”
The question has been and remains: Will the CEO of a luxury house — with a decentralized operation of 60 brands and 2,500 locations around the globe — play well with a China, which has at its core, a centralized market approach and a human rights record nowhere near Arnault’s “non-negotiable moral code”?
The rest of my JustLuxe.com article on Arnault can be found here if you care to have a read!
I've written about my love and slightly annoyed relationship with the French over the past couple of years, but I must say that with Arnault and the fairly conservative Sarkozy, I have been duly impressed. I worry that both men will find themselves on the business end of major conflict soon: Sarkozy with radicalized Muslim factions at home and abroad. Arnault with the Chinese and Middle East autocracies with their crackdowns and zero to very little recognition of human rights impacting his employees and LVMH business interests. Only time will tell.