Bernard Arnault is the richest man in France. He has had several interviews in the past, most of them focusing on his wealth and his life. People want to know the secrets to his wealth and how LVMH started until it became the worldwide leading luxury products company. Today, we’ll give a summary of his interview with CNBC, the leading business news provider. But first, let’s see a brief bio of this great man, Bernard Arnault.
Bernard, CEO and chairman of LVMH- the largest luxury products company globally was born in 1949 in Roubaix, France. He studied engineering at Ecole Polytechnique in 1971. In the same year, he began his professional career by taking over his father’s Ferret-Savinel construction firm in France. He later changed this business’ name to Férinel Inc. and diverted its focus to real estate. Bernard got several promotions along the way before becoming the company’s chairman in 1978.
In 1984, Bernard left Férinel Inc. and began another journey with the Financière Agache holding company. He reorganized and returned this company to profitability by working on a strategy to develop the world’s most significant luxury product company. And in 1989, when he became the LVMH’s majority shareholder, he also took over the chairman and CEO position. Besides his business life, Bernard is also a proud family man. He’s happily married with five children.
From the date of this interview, we learn that it has taken Bernard 25 years to transform this luxury goods company-LVMH and make it what it is now. The company has 60 brands, including leather goods and wines and spirits, cosmetics, jewelry, watches, and perfume. Contrary to what people believed, Japan would own everything, from fashion, cars, luxury products, etc. However, Bernard and his team saw several potentials with global growth and decided to sell the highest-quality luxury products in the global market. When asked how he knew that luxury was to go global, Bernard doubted the relevance of the world’s luxury to their company. But still, they decided to do it anyway, providing the highest quality products with detailed artisan. One good example is the haute couture dresses, whose market was quickly expanding in the 1980s. Moreover, the level of living in the world was also moving up; no wonder our artistic products did well in the market.
Whether he is not afraid of their competitors, they’ll soon take over as most of them are trying to expand the market by lowering prices. He isn’t. Bernard believes that the research for quality cannot go hand in hand with lower prices. People look for values and business models. The LVMH’s business model is all about innovation, quality, and creativity, which he believes no one can beat. For those three reasons, the company creates a healthy and lasting relationship with all its customers globally. These customers continue to search for more highest quality products, which push them to be creative and produce more products of the best quality.
Since the search for the highest quality products is tremendously growing, Bernard’s company continues to employ more people at their different workshops, like in France, where they produce the haute couture dresses and Louis Vuitton bags to meet all the demands. He says this trend is going to stay for a decade, or hopefully more years. Bernard also said that he admires the Apple and iPhone industries, which he compares with his company. His only concern is whether these industries will still rule in the next two decades. After that, maybe another industry with more innovative technology will emerge. However, in two decades from the time of this interview, Bernard is quite sure that people will still drink one of his products, Dom Perignon. That can only show you how strong LVMH is as a company.
He was later asked how he plans to make Dom Perignon, Louis Vuitton bags, and his other creations relevant to stay upmarket for that long, putting in mind the middle east’s new purchasing power, eCommerce, and the emerging market growth. Bernard believes that creating the brands’ history was a wise decision, and it’s one of the reasons why they are thriving today. Most people out there want to visit a Louis Vuitton bags workshop to know when and how it all began, which is a sign that there’s too much hope for the future of that particular brand since they wish to create contact with it. The historical roots they created in the past show how good the future looks, which is a reality worldwide, especially in emerging countries where people are more educated and understand that lower prices cannot equate to quality. According to Bernard, creativity, and innovation that lead to producing the highest quality products and the history of these brands make the future positive. With all these, we’re able to meet the expanding demands out there in the global market.
Based on the different markets out there, Bernard was asked if ever he is worried about a particular market, say China, for instance, undergoing a severe recession, and luxury buyers disappear. First, Bernard believes that China is not going into recession. According to him, China is growing at 7%, making it a fast-growing country. Plus, he says you cannot compare China with Europe, which is not growing as fast. Though China has had its shares of bumps along the way, it has also seen some encouraging economic trends over the years. Its population has also increased significantly. Therefore, Bernard believes that the future for their highest quality products, rents, and the industry overall is still quite good and reliable. The knowledge about the quality of European products in China increases, so as the demand, which explains why our quality products are flourishing there. He believes that this trend will continue even in the next ten or twenty years to come since several Chinese cities are only interested in the highest quality products. This makes Bernard confident about the future of their products in China.
Although the employers feared that remote working would lead to loss of productivity, researches show that working from home is a good way of growing the businesses.