Bernard Arnault: Empire Builder
"If you control your factories, you control your quality; if you control your distribution, you control your image."
This is a follow-up to Bernard Arnault’s origin story.
I am fascinated by Arnault because his journey started with two takeovers and yet he recognized and stuck with the right long-term strategy. That is not a given for a takeover artist. There is a quote Predator’s Ball about Ronald Perelman who took over Revlon: “Ronnie is a deal person. He wants to do deals.” In a similar vein, Riklis once quipped that he was the “the financial wizard rather than the company’s operating guy.” It is not unusual to see takeover artists fail at creating long-term value with the companies they gain control of (or see them shift value from the company into their own pockets).
But Arnault built something lasting. And from the very beginning he pursued global ambitions:
“In 10 years there will be far fewer luxury brands, and the ones that survive will be more important. That's why we have to strengthen our brands.”
It seems to me he may have observed lessons from two of his early adversaries: Both Chevalier and Racamier had been outsiders who understood the value of storied luxury brands, who could see the potential of the growing Asian markets, and who recognized the importance of scale in distribution.