10 insights on the philosophy of the mastermind behind the first #luxury group in the world

1. “The man himself is deeply private”. No need to show off.

2. “I always liked being number one. I told my team we will build the first luxury group in the world” (Michael Burke was among his closest aides since day).

And you need a strong vision and mission to hit the targets.

3. “Some call him a predator”. As his close friend Karl Lagerfeld once said “Fashion is ephemeral, dangerous and unfair.” Let’s say it loud: the luxury and fashion industry is ruthless

4. “LVMH role is to produce products and experiences that convey an authentic sense of value to our customers…What matters the most is that in 10 years time our brands are as desirable as they are today” . The greatest marketing and branding speech.

5. “Profit is a consequence of what we do well; it should never become a goal”. That’s why CFOs attitude never took off at group level.

6. “My wealth is LVMH shares…the result of what we built with the LVMH group. We are the goup that pays the most taxes in France. I always paid my taxes in France”. No tax havens unlike far too many key players

7. “I hate the past. What interests me is the future”

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It’s not surprising that a CTO who worked at Tesco and Unilever before leaves Richemont after five months in the role.

The most relevant luxury companies should innovate in their own way, not following the FMCG.

Luxury groups and brands, to continue to be successful, should make sure they manage their own evolution following the 5 key rules:

1. Train and nurture talents at all levels inside the company and the industry. Sponsor fashion and luxury schools with relevant programs. Create internal academies for keeping managers in-the-social-flow.
2. Have clear what a “luxury mindset” means and clearly put it as a priority in the recruitment profile. Being specific and clear means to be respectful of a luxury entity priorities, which are very different from mass market.
3. Be open-minded about what’s happening on the market. Stay outside the ivory tower of a male-only, uber exclusive luxury approach. Federico Marchetti YNAP is teaching a great lesson about selling hard luxury online
4. Contaminate the industry with the right talents but integrate them with a great support and lots of vision
5. Have clear what it means to manage a luxury brand and how it is different compared to managing a mass market company.

Food for thought.

Bernard Arnault is the founder of the #1 luxury group LVMH, composed by 70 brands. His interests include leather goods, jewelry and watches, wines and spirits. Global and niche brands. All of them prestigious and renown.

His real time net worth today is estimated by Forbes at $ 84.9 billion and he is ranked #4 in the magazine 2018 billionaires list, before Facebook Zuckerberg and Zara Ortega.

He bought Christian Dior in 1985 with $15 million coming from his father assets.

In a time when competitor groups re-organize their brand portfolio to focus on luxury, in a recent interview to CNBC Arnault shared his secret of success.

When considering the acquisition of a brand he always asks:

• “What can the brand be?”
• “How can it be improved?”
• “Also, does it fit with the other brands?”
• ” Is it a competitor?”
• ” (Most of the time it is a competitor) but does it fill a niche where we can see we are not very much present?”

“and when that happens I must say we can move.”

When managing a luxury group becomes a matter of putting all the pieces of the puzzle at the right place organically, Monsieur Arnault does it better.

And it works.