The Taste of Luxury: Bernard Arnault and the Moet-Hennessy Louis Vuitton Story
The takeover battles that assembled the group under Arnault.
Summary
Nadege Forestier and Nazanine Ravai, French journalists, wrote this account of Bernard Arnault's acquisition of control over LVMH, published in 1992 when the events were recent.
The narrative covers Arnault's background, his acquisition of the Boussac textile group in 1984 with backing from Lazard, which came with Christian Dior attached and which he restructured by selling most of the assets, and then the LVMH conflict. Moet Hennessy and Louis Vuitton had merged in 1987 and their respective managements, Alain Chevalier and Henry Racamier, fell into conflict. Racamier invited Arnault in as an ally against Chevalier. Arnault, financed by Lazard and Guinness, built a position and then used it against both of them, taking control by 1989.
The book is written close to the events and reflects the French business establishment's shock at the methods. It covers the legal proceedings, the alliances and the personalities. It predates the construction of the modern LVMH, including the acquisitions of Givenchy, Fendi, Sephora, DKNY, Bulgari, Loro Piana and Tiffany, and the group's transformation into the dominant luxury conglomerate. Readers wanting that should go to more recent accounts. Its value is the detailed record of a contested takeover in a market where such conduct was unfamiliar.
Key takeaways 7
- Arnault's Boussac acquisition gave him Christian Dior, and selling the remaining assets funded the position from which everything followed.
- He was invited into LVMH as an ally by one faction and used the resulting position against both sides.
- Financial backing from Lazard and Guinness gave him the capacity to build a position neither incumbent could match.
- The merger of Moet Hennessy and Louis Vuitton created a management conflict that made the group vulnerable to an outside acquirer.
- French business practice at the time did not anticipate the methods Arnault used, which is why the incumbents were unprepared.
- The book predates the acquisitions that built the modern LVMH and covers only the initial takeover.
- A family or founder-managed business that merges without resolving control creates the conditions for a third party to take it.
Who should read it
Readers interested in contested takeovers and in the origin of the luxury conglomerate, with the caveat that the book stops in 1992.
Where it sits in the reference 2
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