Cross-cultural communication （130）　

130) LVMH
What does LVMH stand for? The correct answer is Louis Vuitton Moet Hennessy. Louis Vuitton is a luxury bag company, and Moet Hennessy is a luxury wine company that produces champagne and brandy. These companies have been integrated, or rather acquired, and are now part of the same company. Although the company name consists of two names, other brands such as Christian Dior and Tiffany are also part of this company. In short, LVMH is a company that has consolidated brands catering to the world's affluent, primarily based in France. The company's performance is truly remarkable, having been on an upward trajectory since the 1980s. Even during the global pandemic starting in 2020, it continued to grow its sales as a target for “stress relief” purchases by the world's ultra-wealthy.

The man who conceived and built LVMH is Bernard Arnault, a French national. After the 1980 French presidential election, when the Socialist Party's Mitterrand won, he concluded that French capitalism had come to an end and moved to New York to study cutting-edge capitalist strategies. There, he conceived the idea of acquiring global brands centered around his homeland, France. There is a well-known anecdote about him. When he took a taxi in France and asked the driver, who was from the working class, about Louis Vuitton and Moet Hennessy, there wasn't a single person who didn't know about it. It seems obvious now, but the affluent not only know the names but also the quality of these brands and have the means to purchase them. He realized that by acquiring all these brands, he could amass an enormous fortune, and he learned the methodology for acquisitions in New York during the 1980s. His own assets continued to grow steadily, and for the past decade or so, he had been ranked among the top 10 richest people in the world. However, before the pandemic, he remained in the shadows of figures like Bill Gates, Jeff Bezos, and Warren Buffett. However, in 2020, Arnault suddenly rose to the top of the list. At that time, his net worth was equivalent to 24 trillion Japanese yen!?

His philosophy?that high-quality, historically significant luxury brands will continue to sell well?is distinctly European. However, his business strategies, including various acquisition methods, were honed in New York, the heartland of capitalism. What is his current management style now that he has reached the pinnacle of success? Arnault has five children, all of whom work for his corporate group. He appears to be steadily implementing a European-style family business model, evaluating individual performance and selecting a successor from among them.?

Finally, an interesting anecdote. Arnault once had a conversation with Steve Jobs, the late founder of Apple. When Arnault asked Jobs, “Will the iPhone still be selling in 30 years?” Jobs replied, “I don't know.” In response, Jobs asked, “Will Dom Perignon still be enjoyed 30 years from now?” to which Arnault reportedly answered, “It will be enjoyed forever.”?
Reference: Nikkei Morning Edition: December 27, 2022, “European Billionaire Polishes Luxury Goods with an American Touch”

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