On the day the house of Dior is presenting its pre-collection of women’s clothing and accessories for the fall 2009 season in Paris, Bernard Arnault, France’s richest man and arguably the most influential tastemaker in the world of luxury, is—in what his wife describes as a recurring phenomenon—“obsessing”.
Step ahead: Bernard Arnault, CEO, LVMH, has no doubt that India’s economy will rebound quickly. Gerard Cerles / AFP
“I just don’t like it. I don’t like it at all,” Arnault mutters as he examines a red-rimmed cotton canvas bag. The shelves of Dior’s sunlit showroom are neatly stacked with dozens of purses, totes and clutches in leather, shearling and python. To one side sit $1,900 (around Rs95,000) serpent-shaped, crystal-encrusted sandals with 6-inch heels and shiny patent-leather ballerinas. Yet Arnault is fixated on this one $750 tote. He tugs disapprovingly at a round plastic pendant on the bag’s handle. “Can this be taken off?” he asks the cluster of Dior executives standing behind him. He takes the bag off its perch and continues: “The black and grey versions of the bag are already bordering on the commercial, but the red goes too far…it’s just not Dior.”
As chairman and majority owner of LVMH Moët Hennessy Louis Vuitton SA, which includes high-end brands Louis Vuitton, Givenchy, Tag Heuer watches, Donna Karan, Fendi and Moët and Chandon champagne, and of Dior and other companies, Arnault is required on a daily basis to balance the business needs of his sprawling empire with the exquisite good taste those brands must convey. What Arnault thinks matters globally. His is a $22 billion company in a $200 billion business.
Arnault and his industry find themselves staring into the abyss. As the world dips into one of the worst economic downturns ever, consumers have never been more divided where their tastes and spending habits are concerned. Self-conscious shoppers on Fifth Avenue, New York, are demanding markdowns and toting their purchases in brown paper bags, while customers in Beijing are lining up for the newest Louis Vuitton Stephen Sprouse bags. A rash of drastic discounting across America in early November rendered the idea of full-price designer goods anathema and, some say, changed the face of high-end American retail for years to come. “If someone buys their mother or girlfriend a bag, he doesn’t want to see it at 60% off the next week,” Arnault says over a breakfast of scrambled eggs and peach yogurt in his office one morning in January. A tall, slim figure who just turned 60, he is a strict no-carbs advocate. A recent diet has left him 18 pounds lighter and faster around the tennis court, he says.
Also See A Guide to the Principal Holdings of Bernard Arnault (PDF)