Acquired · Hermès
Founders · Mar 5Bernard Arnault (The Richest Man in the World)
Arnault took control in January 1989 at 39 after the 1987 crash and a founders' feud left it exposed, buying 800,000 shares (8%) on January 5 and 6 as the price rose from about 1,250 to 4,720 francs. He declared on day one that one person would run it and make it the world's biggest luxury group.
Tips
- Bernard Arnault kept buying LVMH shares at record prices while his rivals sold▶ 55:57The price rose from about 1,250 to 4,720 francs, and on January 5 and 6, 1989 he bought 800,000 shares, 8% of LVMH, to take control.
- Arnault bought LVMH shares in the 1987 crash, on his mentor's advice to wait▶ 39:00LVMH was quoted at only 1,200 francs, down 50%, when he started looking at it.
- Arnault played LVMH's two feuding founders against each other, and each thought he was an ally▶ 54:22Chevalier resigned in the corridor on January 6, 1989, saying he had played and lost.
- Henri Racamier picked Arnault as an ally because he looked too young to be a rival▶ 52:50Arnault was sworn in as chairman on January 13, 1989, about six months after he began his final move.
- LVMH's two founders let petty fights over offices and champagne open the door to Arnault▶ 50:58Chevalier himself had compared the merger to a marriage between a carp and a rabbit that would end in divorce.
- Arnault targets timeless brands because time is the best filter for durability▶ 1:02:26He described what he owned as rare and likely to increase in value over time.
- Arnault saw luxury as a true industry before anyone else and pursued it for the margins▶ 1:00:20The same dismissed industry is now one of the largest in the world and made his family among the richest.
- Arnault stated at 40 that he wanted LVMH to be the world's biggest luxury group▶ 57:55He first had to carry about 11 billion francs of investment and rebuild his war chest after the takeover.
