This is my take on Bernard Arnault’s origin story and the first of two posts about him. The second post, provides additional color on his strategy as well as sources for further reading.
Bernard Arnault, now the world’s richest man, is known for his leadership of LVMH, the acquisitive French luxury conglomerate. Long before becoming a captain of industry, Arnault was a takeover artist, a pirate. The press called him “the wolf in the cashmere coat.”
He rose by orchestrating two exceptionally successful and shrewd deals which ultimately put him in control of LVMH. Arnault identified the right opportunities, used his business and political networks, then executed his deals - and outwitted his opponents - with relentless focus and persistence.
Once in control, he combined a hunger for acquisitions with an appreciation of brand value and quality. He built an empire to satisfy the world’s hunger for status symbols.
Arnault once remarked that the only man who fascinated him was Fiat’s Gianni Agnelli, grandfather of John Elkann, who embodied the “supremely successful industrialist and unequalled power.” That describes the Bernard Arnault of today. But key lessons of his life are buried deep in his past.
Takeover artist: Arnault fought France’s business elite for control of two public companies. He had to master all the pieces to win: financing, winning management and political support, and an understanding of the asset value.
Playing the player: Arnault expertly outmaneuvered more experienced and wealthier adversaries, often hiding his own intentions until the last moment.
Value: Arnault recognized the long-term potential of France’s luxury fashion brands and discarded lower quality assets.
The right friends: While he is sometimes described as formal and cold, Arnault’s success rested firmly on his ability to form alliances in banking, politics, and with other shareholders.
Leverage: Arnault obtained capital through a variety of ways: through his banks, by shedding assets, and by selling minority stakes at different levels of his empire. He retained control but freed up cash for future deals.