TIME EUROPE
January 15, 2000, Vol. 157 No. 2
The Upmarketeer's Tale
Bernard Arnault built his house by selling at deluxe prices and in his book he's still giving nothing away
By ERIKA BUCK Paris
"Emperor of Luxury," "Pope of Fashion," "Lord of the Logos." Those are are just a few of the titles the fashion press has given Bernard Arnault, the reserved French businessman behind LVMH, the luxury empire that includes many of the world's best-known brand names: Christian Dior, Louis Vuitton, Guerlain and Dom Perignon among them. But Arnault's aggressive efforts to extend LVMH's holdings have also earned him less flattering names, like "the Terminator" and "wolf in cashmere clothing." His longtime rivalry with another French luxury baron, Pinault-Printemps-Redoute head François Pinault, made headlines again last November when LVMH's allegations that shady practices allowed PPR to take control of Gucci Group sparked a flurry of defamation lawsuits between the groups.
Despite all the media attention, Arnault himself has remained elusive. He maintains that his accomplishments speak more eloquently than his words, "a little like a musician who one would prefer to hear play the piano than to speak." Those who would prefer to hear the pianist talk about his work may welcome The Creative Passion (Plon; 201 pages). But the format, a long interview between the businessman and French journalist Yves Messarovitch, may leave fans searching for the tune.
At age 35, a few years after taking over the family construction firm in Roubaix, France, Arnault entered the luxury market with his 1984 acquisition of Christian Dior. A longtime fan of that fashion house, he recognized the enormous value of its brand. "Dior is probably the best-known French name in the world," Arnault says. "What do you know of France — the name of the country's President?" he once asked a New York City taxi driver. The cabbie responded, "No, but I know Christian Dior."
An amateur pianist and patron of the arts, Arnault was drawn to the luxury-goods business by a desire "to create an economic reality out of the ideas of our group's creators." But creativity, he soon learned, is only part of the fashion equation. Perhaps more important are the giant billboards and glossy fashion pages that speak of a fantasy world where every woman is dripping in Dior and toasting the good life with a golden glass of Moët. Arnault understands that image is — almost — everything and devotes his energies to nurturing the way the world sees his stable of brands. "It is necessary not to lose sight of the fact that, to sell a product, it is necessary to make people dream," he says. "A woman identifies with a lofty ideal more than with a normal person."
Arnault's image consciousness drove his controversial decisions to install outsiders as designers at France's most venerable fashion houses — Alexander McQueen at Givenchy, Marc Jacobs at Louis Vuitton and John Galliano at Dior. Galliano's recent shows — inspired by the homeless and by sadomasochistic fantasies — drew harsh criticisms, but Arnault points out that Dior's ready-to-wear sales have increased fourfold since Galliano's arrival. He fondly quotes Christian Dior's philosophy about fashion shows: "What counts with critiques is not whether they're good or bad. It's whether they're on the front page."
Despite his immersion in the flamboyant fashion world, Arnault remains famously reserved, even in this supposedly revealing book. Most disappointingly, his rivalry with Pinault and the Gucci affair warrant barely three pages. PPR's 1999 purchase of 42% of Gucci saw LVMH's stake in the coveted fashion house plummet from 34% to 20% and has led to prolonged legal cross-fire between the two companies. At this point, Arnault sounds like a jilted lover: "It's true that I was surprised to see François Pinault attacking our group in the Gucci affair; even more so because before that I had a very friendly relationship with him. You could say to me that I should have been more on my guard, and you would have been right."
Arnault haughtily dismisses Pinault's efforts to expand his luxury empire. "If I understand it properly, his efforts consist of trying to imitate what we have done with LVMH, on a smaller scale. It is always flattering to be imitated." Pinault again flattered LVMH last month, poaching its star designer Alexander McQueen. LVMH replied days later, bidding $645 million for both Donna Karan's private label stable and the publicly held Donna Karan International.
As his catfight with Pinault rages on, Arnault is also busy extending LVMH's presence further into the retail marketplace, with the recent bid for control of the Paris department store La Samaritaine and the launch last year of the e-commerce site eluxury.com. While skeptics doubt that the Internet, with its ethos of universal access, is a viable market for luxury goods, Arnault refutes that theory, as he no doubt dreams of a new title: Earl of E-Commerce.
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