Word: arnault
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Dates: during 2000-2009
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...ensure that he brings in the buzz that drives the biz, Arnault hires edgy, critically acclaimed young designers who never made a centime of profit when they ran their own houses but who excel at engaging, exciting and infuriating the fashion press. Arnault points to John Galliano's spring collections for Dior this year as typical of what he wants from his designers. "His ideas are not meant to be worn," Arnault says of the avant-gardish collection of bag-lady-style ball gowns, "but the ideas descend down to pret-a-porter and to everything in the line...
...runways, though, LVMH behaves like a cost-conscious maker of discount goods. Arnault has reined in expenses and, wherever possible, combined the production of his swank brands to create manufacturing efficiencies. Guerlain and Dior perfumes share plants, for example, as do Loewe and Louis Vuitton leather goods...
Among high-fashion potentates, Arnault has taken an early lead on the Internet. Individually and through Europe@web, a holding company and incubator of new firms, Arnault has made lucrative early investments in eBay, LibertySurf (a European Internet-service provider) and Nomade (France's top Net portal). Coming soon: eLuxury, LVMH's luxury-goods portal, set to launch this month. "With our brands, we should be able to dominate on the Web as well," Arnault says, adding that he plans to take Europe@web public this year, possibly as early as next month...
...Arnault hates to admit it, but he still desperately wants to make Gucci the jewel in the LVMH crown. The leather-goods maker is exactly the type of company Arnault knows how to maximize: a hot name with tightly held licensing and underexploited accessories markets. During the '80s Gucci became an overextended brand synonymous with suburban housewives. Starting in 1994, Gucci's De Sole and Ford began cutting back on licensing while focusing on building up the core fashion and leather-goods businesses. Ford persuaded celebrities like Tom Hanks and Madonna to don Gucci suits, and in just four years...
Both men take great pride in their remaking of the company and were horrified when it looked like Arnault--of whom Ford has said, "We could teach [him] a few things about this business"--would capture Gucci. To fend off the raider, the partners brought in self-made French billionaire Francois Pinault, the owner of Christie's auction house and part owner of Converse shoes, who used a controversial clause in Gucci's bylaws to purchase a 42% stake in the firm for $2.9 billion. Arnault insists Gucci's white-knight strategy was illegal, and the battle for the company...