On Everything #117: What I Learned From the Book Bernard Arnault Tried to Ban

On Everything is a weekly newsletter from Eugene Rabkin, our founder and editor.

(Hello all. I am taking a two-week break from the newsletter. It’s not exactly a vacation, but I will be in Tokyo for fashion week. However, I am leaving you with this absolute bombshell of a newsletter, which I am sure you will enjoy.)

Bernard Arnault, the de-facto owner of LVMH, has long been called “the wolf in cashmere” for his suave persona that masks a ruthless corporate raider. The broad outlines of how he initially built his empire are known, but details are scarce. One book, however, went into deep detail into Arnault’s machinations in the ‘80s, the formative period of his empire in which he took over both Christian Dior and LVMH. This book has been a thorn in Arnault’s side for decades and he has tried to buy up every copy of it and get it out of circulation. I recently read the book in great detail, and here is what I learned (link to the book at the end of this newsletter.)

“I am the boss. I shall be here on Monday morning and I shall be running the company in person,” were the first words of Arnault’s after the hostile takeover of LVMH. His first day at the office was January 13th, 1989; Arnault was not even 40 and he already controlled the most expensive company in France, comprised of Christian Dior, Givenchy, Christian Lacroix, Moét et Chandon, Veuve Clicquot, Hennessy, and, of course, Louis Vuitton, as well as the storied department store Le Bon Marché, among others.

Alain Chevalier, the former chairman of LVMH resigned from the company he painstakingly built over twenty years, at the first meeting on the first day of Arnault’s takeover. At the time of the takeover Moet-Hennessy was the larger subsidiary than Louis Vuitton (today it is responsible for only 10% of LVMH’s profits). Arnault displayed extraordinary pettiness while editing the draft of the press release that announced his chairmanship. He added that he was “elected unanimously,” and took out Henry Racamier’s, the chairman of Louis Vuitton, title of vice-chair. The two would go through a nasty drawn-out battle for control and ownership.

How it all began:

Arnault was looking to build a conglomerate, but he wasn’t sure what exactly he wanted to do. He did understand that luxury was France’s premier export. One day when Arnault was living in the US, he was in Bloomingdale’s buying a blue, red-trimmed dressing gown and a suit, he chose Dior, thinking, “There isn’t a better name. In the United States the "president" of Dior is better known than the President of France.”