Today’s newspapers are reporting with surprise about a mysterious coup in the french industry - the luxury giant LVMH bought 17.1 % of Hermès’s shares, without Hermès even knowing about it ! By doing that, LVMH became the second most powerful share holder, right after the Hermès family. I believe this is a good opportunity to discuss LVMH, a one-of-a-kind octopus that touches your life and mine more then we might think.
Let me explain: a girl, we can call her Suzy, wakes up in the morning, takes a shower and gets dressed. Suzy puts on a set of kenzo lingerie, a dress from Céline, a pair of Marc Jacobs shoes and turns to the bathroom to perform her make-up routine. She applies a Guerlin foundation, mascara from Dior, a Make Up Forever lipstick and a Sephora blush.
On the way out she spritz herself with some Givenchy perfume, throws over a Donna Karen coat, grabs her Louis Vuitton bag and goes out the door.
Suzy adores fashion her taste in style is exquisite… She picked each and every one of these cherished possessions carefully. Do you think that she knows that all of her wardrobe and beauty products come from the same source? Do you think she would have bought them if she did? Probably not, and that’s what makes LVMH so powerful in the industry today. As powerful as 77,000 employees worldwide and an annual revenue of 17.053 billion Euros (net profit of 1.973 billion in 2009).
LVMH was created in 1987 after the wine group Moët Hennessy merged with the leather goods and fashion house Louis Vuitton. Over the years and after many taking-overs, the group grew to control more than 60 different labels, mostly in Fashion, beauty, wine and jewelry. The acquired companies keep their identities and maintain some kind of an autonomic activity, but they all report to the same headquarters. Practically speaking, you buy LVMH products all the time, without even knowing.
In the group’s little black book one might find all of the examples above plus Fendi, Emilio Pucci, Acqua di Parma, Benefit Cosmetics, Hublot, Zenith, Château d’Yquem, Loewe, StefanoBi, Dom Pérignon, Chaumet, Le Bon Marché, and the list goes on and on…
And the plot thickens when you go up a scale – the group Christian Dior owns 42 % of LVMH’s shares (wait, aren’t they supposed to compete ?). Both groups are under the control of a privet company – Group Arnault SAS who belongs to the french business man Mr. Bernard Arnault, chairman of both Christian Dior and LVMH. According to Forbes Magazine, Arnault is the world’s 7th richest person, with an estimated wealth of 27.5 billion Dollars (before the Hermes ambush).
Does it all sounds too complicated to you ? Maybe you should start reading the financial newspaper Les Echos. Can you guess who it belongs to ?
*hint : it’s a four-letters initials.

Christy Turlington, Natalia Vodianova and Karen Elson by Steven Meisel