Arnault, Bernard

▪ 1998

      During much of 1997 French businessman Bernard Arnault, the president and chairman of the French conglomerate LVMH Moët Hennessy Louis Vuitton, the largest luxury-products company in the world, attempted to quash the proposed $38 billion merger of Guinness PLC and Grand Metropolitan PLC (Grand Met)—two British spirits and food firms in which he was a major shareholder. Despite his efforts the deal, which created Diageo PLC—the world's largest spirits company—went through. In May Arnault, who had issued a legal challenge, complained, "I do not see any logic combining hamburgers, food, wine, and spirits; I think there are better ideas."

      Arnault's better idea had been to become the leading shareholder in a new company. He proposed that the beverage businesses of Guinness, Grand Met, and LVMH be merged and that the new firm divest itself of the Guinness breweries and such food entities as Burger King Corp. and Pillsbury Co. Although his grand plan did not succeed, his worries were, according to The Economist, "assuaged by a promise of £250m when the [GMG] deal goes through."

      Arnault was born on March 5, 1949, in Roubaix, France. He graduated from the École Polytechnique in Paris with a degree in engineering but left France in the early 1980s to pursue a career in real estate in New York City. Four years later he was back in France on the cusp of his first big fashion deal and armed with American business know-how and skills at playing hardball.

      With $15 million of his own money, Arnault and Antoine Bernheim, a managing partner of the French bank Lazard Frères and Co., raised the $80 million necessary to purchase Boussac, a bankrupt textile company that owned the fashion house of Christian Dior. Then, in 1987, Arnault was invited to invest in LVMH by the company's chairman, Henri Racamier. Investing through a joint venture with Guinness, Arnault soon ousted Racamier and started to sweep a slew of fashion companies into the LVMH fold: Christian Lacroix, Givenchy, Kenzo, the leather goods companies Loewe, Céline, and Berluti, the jeweler Fred Joailler, the DFS group (the world's biggest duty-free chain), and Sephora, a chain of perfume shops.

      Although Arnault was not a household name in the U.S., he was known in Europe as the man who revitalized French couture in 1995 by appointing British fashion designer John Galliano to replace the venerable Hubert de Givenchy at the latter's Paris fashion house. The "Pope of Fashion," as Arnault was dubbed by Women's Wear Daily, a year later moved Galliano to Christian Dior and appointed the brash British fashion designer Alexander McQueen to replace him. Arnault then hired Marc Jacobs, a young American designer, to the post of creative director at Louis Vuitton, the maker of luxury leather goods.

      Even though his fashion foresight had revived interest in these traditional fashion houses, Arnault was both loathed and respected by his countrymen. He was unrepentant in his approach. "I am not interested in anything else but the youngest, the brightest and the very, very talented."

BRONWYN COSGRAVE

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