LVMH Group is the world's largest luxury goods group, the Chinese name is "Lu Wei Xuan Xuan". LVMH is the abbreviation of Moet Hennessy Louis Vuitton. The Chinese name is France Hyundai Hennessy-Louis Vuitton Group. As can be seen from the complex company name, LVMH Group covers three famous brands - Louis Vuitton bags ( Louis Vuitton), Moet & Chandon and Hennessy. Moreover, there is also a well-known brand "Dior", which also has a close relationship with the LVMH group. LVMH Moet Hennessy Louis Vuitton has 70 brands that design high quality products. It is also the only group that covers the five main areas of the luxury market – wine and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewellery, and high-end retail.
The combination of Moet and Hennessy Moet's full name is Moet & Chandon, the world's most popular champagne brand. In 1743, the wine merchant Claude Moet, who lives in the Champagne region, established the champagne business. His grandson Jane-Remy Moet made the Yueyue brand famous all over the world, because of its deep friendship with Napoleon, the champagne brand was hit and won the reputation of “Royal Champagneâ€. From 1805 to 1841, Mou Yue became the most famous wine merchant in Europe. Dom Pierre Perignon (1638-1715) is known as the father of French champagne. During the French Revolution, the Abbey of Hautvillers and vineyards where Perry had lived were confiscated, and the Mouy Winery purchased huge sums of money at the auction. The Yueyue Winery opened the birthplace of this champagne wine to the Champagne Museum and set up a bronze statue of the Pelican monk, so that the champagne lovers can visit the “pilgrimage†mentality, so that the drinkers think that Yue Yue is The most authentic champagne. In 1927, Mou Yue decided to name the 1921 Champagne stored in the cellar "Dom Perignon". Became the first vintage Champagne of Don Pelican Champagne.
In 1765, the Irishman Richard Hennessy, who once worked for the French King, was keenly aware of the huge international sales potential of the COGNAC “eaux-de-vieâ€. The area has established its own winery. Starting with the United States, Hennessy has blossomed around the global market since the late 18th century. In the early 19th century, Hennessy appeared in the Australian and Southeast Asian markets. Since then, the markets of South America, Japan and China have also been opened. In 1860, a quarter of the total sales of cognac in the world came from Hennessy. By 1967, the winery had sold for one million cases. By 2013, Hennessy sold a total of 5.5 million boxes of premium wines, making it the world's number one top French wine and spirits brand. In 1971, Moet & Chandon merged with Hennessy's two wineries to form Moet Hennessy. Louis Vuitton and the LV logo In 1837, Louis Vuitton, only 16 years old, bid farewell to his hometown to Paris, and he was apprenticed with luggage craftsmen. In 1853, Louis Vuitton was promoted to be the chief assistant of the boss and became the most trusted luggage expert of the French empress.
From 1947 to 1957, Dior re-defines the concept of elegance and femininity by designing glamorous fashions for ten years. Christian Dior's name is world-renowned and synonymous with French luxury. In 1947, Dior held the first Haute Couture fashion show. Dior believes that perfume can play a role in icing on the cake. When he launched his first ready-to-wear collection, he launched the Miss Dior fragrance, which also updated the global luxury design concept. In 1953, Dior listed the first lipstick. In 1955, Dior hired Yves Saint-Laurent, a 19-year-old, as a design assistant. In 1957, Mr. Dior became the first fashion designer to be on the cover of Time magazine. On October 24, 1957, Christian Dior died of a heart attack. At the time, Yves Saint Laurent, who was only 21 years old, was appointed as the chief designer and became a hit at the fashion show, so he was also known as Christine II. However, since then he left Dior because of his enlistment and illness, and in 1962 he founded his own brand YSL (Yves Saint Laurent). In 1968, Dior Perfume was sold to Hennessy by Boussac. In 1978, Dior's parent company, the Boussac Group, went bankrupt and the Willot Group purchased its assets. In 1981, the Willot Group also declared bankruptcy.
Arnold acquired Christian Dior in 1949, Bernard Arnault was born in an industrial family in France. In 1971, Arnault graduated from the Polytechnic of Paris and entered the Ferret-Savinel Construction Company founded by his father to become an engineer. Subsequently, he was promoted to various senior management positions and became chairman of the company in 1978. In 1981, after French President Mitterrand came to power, a large number of conservative entrepreneurs in France chose to go to the United States to develop their careers, and Arno was one of them. When he lived in the United States, Dior perfume began to be sold in department stores in the United States. This brand from his hometown comforted his homesickness, making him a soft spot for Dior. In 1984, 35-year-old Arnault returned to France from the United States. In the wave of privatization in France, he acquired the owner of Christian Dior, Willot Group (later renamed Financiere Agache by Arnault). Arnault subsequently reorganized Financiere Agache Holdings. In 1985, Arnault became the chairman and CEO of Christian Dior. He took the strategy of developing the world's top luxury goods companies and made the group profitable. During this time, he revived Christian Dior as the cornerstone of building a new corporate organization.
In 1987, Arno used liquid assets to buy clothing and leather goods company Celine to improve its position in the apparel industry. The LVMH Group was born in the 1980s, and Moet Hennessy Group has been worried about being acquired because of the decline in family holdings. Louis Vuitton is worried that the market is too dependent on the purchasing power of the Japanese. So in 1987, Louis Vuitton and the Moet Hennessy Wine Group merged under the French bank to form the LVMH Moet Hennessy Louis Vuitton Group. Alain Chevalier, president of Moet Hennessy, became president of the group, and Henry Recamier, president of Louis Vuitton, became chairman of the group's strategy committee, but the two were formerly subsidiaries of the group. The company's position remains unchanged. After the merger of the two companies, the two founding families collectively held 35% of the shares of the new company and more than 50% of the voting rights.
However, the combined Louis Vuitton and Moet Hennessy were quite independent in their actual operations and did not achieve good business integration and collaboration. The founding family of Moet Hennessy belongs to the nobility, the Louis Vuitton family is a civilian, and the two families are psychologically and culturally incompatible. At that time, in order to expand the sales of alcohol in overseas markets, Chevalier had LVMH and the British beer manufacturer Guinness PLC signed an international distribution agreement and held each other's shares. This has also led to conflicts and power struggles between the two managers, Chevalier and Lakamie, in the case of reinforced alcohol or clothing and leather products. Arnault attacked LVMH. At the time, Arnault owned Dior Couture, and due to the merger of Moet Hennessy and LV, the ownership of Dior perfumes was attributed to LVMH Group. Arnold wanted to take the Dior perfume back into the Dior system, but was rejected by LVMH. In order to capture Dior perfume, Arno formed a joint venture Jacques Rober through Christian Dior and British Guinness (Ginex and LVMH), Arno controlled company holding 60%, Guinness holding the remaining 40%. In October 1987, the stock market crashed and Arnold dared to attack and collect LVMH shares at a very low price.
Soon, Arnold controlled a 43% stake in LVMH Group. After becoming the largest shareholder of LVMH, Arnault overwhelmed the original team of Moet Hennessy and Louis Vuitton. In 1989, Arnault completed his goal of creating the world's top luxury goods group and gained control of LVMH. Since then, Bernard Arnault has served as Chairman and CEO of the LVMH Group. After that, Arnault wanted to reinvest the partner Guinness, but Guinness did not agree. Thus, by modifying the agreement with Guinness, the shares held by Christian Dior in the LVMH Group increased from 24.5% to 41.6%. In 1997, the two major wine companies, Guinness and Grand Metropolitan, merged into Diageo. After making LVMH a luxury giant, Arnault used AUMH to become the global luxury industry leader for 20 years. In the late 1980s, the LV package with fine workmanship became synonymous with tedious and expensive, and the younger generation no longer favored LV. In 1997, Arnott hired Marc Jacobs, an avant-garde designer from New York, as the company's creative director. After studying the history of LV, Jacob invented a series of unique designs with a modern atmosphere, making LV bags increasingly competitive.
Subsequently, LV began to use the public relations gimmicks, signing with celebrities and other means to create influence. LV spent $1.5 million on renovating a store in Paris, building scaffolding in the shape of two LV suitcases on the outside of the store. This scaffolding became a huge advertisement with significant results. The most effective means is to create artificial scarcity, and the company launches high-priced products in limited quarters. A $5,550 handbag was originally available only at specialty stores on Fifth Avenue in New York, USA, and consumers in London and New York have to wait a few months to buy the handbag. The purpose of this kind of handbag is not to make money, but to arouse people's envy. In the 1990s, Arnott began to aggressively acquire luxury brands that were even more upscale than LVMH, including shirt makers Thomas Pink, Chaumet jewelry, Fendi leather goods, Pucci and Donna Karan fashion, Krug champagne and TAG Heuer. Arnott focuses on brands with lower-than-expected but promising brands, including women's brands Celine, Zenith watches, Pucci fashion and Ruinart Champagne. In 1992, Louis Vuitton opened its first boutique in the Wangfu Hotel in Beijing, China.
The failure to compete for Gucci and Hermes has been said that Arno wants to put him in a bag if he sees a beautiful brand. This is his obsessive-compulsive disorder. In January 1999, the LVMH Group used a regulatory loophole to purchase a 34.4% stake in Italian leather goods manufacturer Gucci in a short period of 20 days. In the face of this situation, Gucci proposed to let LVMH full acquisition, but Arnault refused, because all acquisitions cost too much money, it is not cost-effective. After being rejected by LVMH, Gucci decided to expand the shares and sold 42% of the total share capital to the Paris Spring Group (PPR, now renamed Kaining Group) for $3 billion.
After the expansion, PPR became the largest shareholder of Gucci, while LVMH's shares in Gucci were diluted from 34% to 20%. Not only that, Gucci also reached a strategic agreement with PPR to ensure the independence of Gucci and continue to develop multi-brand strategy. Gucci's move annoyed Arnold. He filed a lawsuit in the Dutch court and asked to investigate it. The court held that Gucci had misbehaved, but did not decide to cancel the Gucci Group's transaction with PPR. LVMH appealed to the Supreme Court of the Netherlands. After repeated consultations, LVMH Group finally agreed in 2001 to transfer the shares of Gucci Group to PPR. As a result, PPR acquired Gucci Group for $8 billion and became the world's third-largest luxury goods group from a single retailer. In October 2010, Arnault suddenly announced that LVMH Group has purchased a total of 17.1% of Hermes shares through equity swap.
This is beyond everyone's expectations, and because LVMH's share price is lower, with the Hermes share price rose sharply, it has recorded huge book profits. LVMH has always liked to buy, although Arnault claimed that it did not intend to host a hostile takeover and would not seek a seat on the board. However, the Hermès family, which holds more than 70% of the company's shares, apparently does not want Arnold to put a hard foot on their company, because LVMH is also Hermes' biggest competitor. Moreover, the arrogant and flashy luxury style of Lu Wei Xuan also makes it difficult for Hermès, who insists on hand-stitching tradition, to be unacceptable. However, in the 1980s, when Shevalier was in charge of the Moet Hennessy Group, Shevalier bought a 15% stake in Hermès. After the merger of Moet Hennessy and LV, the equity is owned by LVMH. Later, Hermes went to Arnault to buy back the equity because it was going to go public.
At the time, Arnault was busy reorganizing LVMH and adjusting its development direction, and agreed to sell the 15% stake. Perhaps, because he once held a 15% stake in Hermès, Arnault may feel that this time it is reasonable to have a 17.1% stake. However, the French stock market supervisory authority issued a fine of up to 8 million euros to LVMH, because LVMH has concealed all the stages of the increase in Hermes shares, and has seriously violated the information disclosure rules. But since then, Arno continued to buy Hermes stock and increased its shareholding to 23.2%. In 2014, under the mediation of the Commercial Court of Paris, LVMH agreed to abandon most of Hermès shares held and will not acquire them in the next five years. Under the settlement agreement, LVMH, controlled by Arnault, will distribute its shares in Hermès, and the Christian Dior Group, the largest shareholder of LVMH Group, will transfer these Hermes shares to its shareholders. Arnault's family holding company, Groupe Arnault, will still hold approximately 8.5% of Hermès shares. Arnold family's shareholding structure
Bernard Arnault is chairman of the board of his family holding company, Groupe Arnault SA. The Arno Group controls Financiere Agache SA. Financiere Agache holds a 70% stake in the Christian Dior Group. Christian Dior holds a 41% stake in the LVMH group. Christian Dior is the world's largest premium fashion brand holding company and the parent company of the LVMH Group. The Christian Dior Group holds a 100% stake in Christian Dior Couture, which is not a subsidiary of the LVMH Group. As the luxury goods industry has slowed down in all major markets around the world in 2013 and entered the winter in 2015, the performance of luxury brands has fallen sharply. LVMH Group shares fell 12% in a year, Bernard Arnault, who has won the title of French rich man for seven consecutive years, also gave the 2016 French richest man to the L'oreal.
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