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The house of LVMH

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Aman Sani

on 23 September 2013

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Transcript of The house of LVMH

And this is the baby THE three men created!
Why LVMH is LVMH
Introduction
Louis Vuitton Moët Hennessy (LVMH) is a French multinational luxury goods conglomerate with it’s headquarters in Paris, France.

In 1971, Moët & Chandon and Hennessy merged together to form a company known as Moët Hennessy. Later in 1987, LV merged with Moët Hennnessy to form LVMH. As a result, they went on to become the world’s largest multinational luxury goods conglomerate till date.

Today, it has control of around 60 subsidiary companies, each being capable of managing their own brands, as well as being independent.

2013
Top 10 Luxury Brands - Fashionweekdaily

1. Louis Vuitton
2. Hermès
3. Gucci
4. Prada
5. Rolex
6. Chanel
7. Cartier
8. Burberry
9. Fendi
10. Coach
THE DEVIL WEARS LVMH
French winery and one of the world’s
largest champagne producers.
Founded by Claude Moët in 1743.

The company has the Royal Warrant to supply
champagne to Queen Elizabeth II.

Today, it owns more than 2,500 acres of vineyards and annually produces approximately 26 million bottles of champagne.
After his death, the control of the champagne house
went to his grandson, Jean-Remy Moët.

2012

Top Luxury clothing brands - Forbes

1. Gucci
2. Louis Vuitton
3. Burberry
4. Chanel
5. Versace
6. Prada
7. Dior
8. Alexander McQueen
9. Giorgio Armani
10. Ralph Lauren

2009

Top Luxury Brands - Forbes

1. Louis Vuitton
2. Hermes
3. Gucci
4. Chanel
5. Rolex
Decentralized design
Quality and cost control
Knowledge sharing
Diversification
Acquire star brands
International Strategy

Core strengths


Acquisitions and Organic Growth
Managing creativity
Top designers
No financial constraint on designers
Control in manufacturing
Financials
Conglomerate Luxury brand consisting of Loius Vuitton, Moët & Chandon and Hennessy.
Christian Dior is the parent company holding 42.36% of shares and 59.01% voting rights.
Revenue €28.103 Billion (2012),
Operating income €5.921 Billion (2012)
Profit €3.909 billion (2012)
Total assets €49.9 billion (2012)
Total equity €25.66 billion (2012)
Listed on Euronext

Performance post depression
Share Performance

2008 crisis hit most markets hard.
Many key credit markets and banks were affected
The EURONEXT recorded a drop after 5 years of successive growth.
LVMH share price has almost doubled in these 5 yrs, but closed at 42%, i.e. 47.77 Euros.


LVMH is active in 5 different sectors :

Spirits & Wines
Fashion & Leather Goods
Perfumes & Cosmetics
Watches & Jewelry
Selective retailing
Since it’s creation, LVMH has over 3,000 stores worldwide and has given work to almost 100,000 employees

Debt Financing
Regional Distribution 2013
Millions of dollars raised via commercial papers arranged by BNP Paribas.
Return rates range from 1.25-4.5%
Shares are registered through Banks and as Bearer Shares

Currently, The share price of LVMH stands at 139 Euros, as on 23/8/2013
Negative currency impact
All key regions showed solid increaseswith the exception of Europe
Emerging countries continued to see strong growth.
Continued progress at Louis Vuitton and sustained development of other fashion brands, on top of particularly strong increases in Q1 2012
Good performance of Wines & Spirits and Selective Distribution
1st Quarter revenue stands at 6.9 billion Euros, an increase of 6%



Current Status
Louis Vuitton
Louis Vuitton Malletier (LV) is a French fashion house which was founded in 1854 by Louis Vuitton, a French businessman. It is one of the world’s big international fashion houses.

It’s products mostly include leather goods, shoes, watches, jewelry, accssessories, etc. LV sells it’s products in places such as department stores, boutiques and their own website for online orders.

The founder Louis Vuitton was born on 4th of August,
1821 in Anchay, a small hamlet in east France.
Bored and fed up of the life he had in that village,
he decided to run away to Paris and start a new life there.

In 1837, he reached Paris, a city capable of rapid growth and grandeur. He was taken as an apprentice in the workshop of a successful box-maker and packer named Monsieur Marechal. after which he would become famous for this craft.

After Napoleon III became the emperor of France,
his wife hired Vuitton as her personal box-maker where he would be asked to ‘pack the most beautiful clothes in an exquisite way. Through this, he would go on to start LV
where people of the elite class would come
and render his services.

Their main objectives are :

To be creative and provide innovation
To aim for product excellence
To boost the image of their brands
To act as enterpreneurs
To be the best and keep improving in any and every way possible

Christian Dior
Christian Dior, a French luxury goods company founded in 1946, is the main holding company of LVMH. They own 42.36% of their shares and 59.01% of their voting rights.

It designs ready-to-wear items, leather goods, fashion accessories, footwear, jewelry, perfumes & colognes, etc.

Moet & Chandon
Henessy
Jas Hennessy & Co. is a cognac house with headquarters in Cognac, France. It was founded by Richard Hennessy in 1765.

Today, the company sells about 50 million bottles annually worldwide, making it the world’s largest cognac producer.

The cognac distillery was founded and set up by Richard Hennessy in 1765. During the 1970s, Kilian Hennessy, direct descendant of Richard, became the CEO of the company. He was the one who encouraged and led the company’s merger with Moët & Chandon which created Moët Hennessy.

Bernard Arnault
Bernard Arnault, born 5th of March, 1949, is not only a French business magnate but also an avid art collector.

In 2012, Forbes magazine named him the world’s 4th richest person with a net worth of $41 billion.

In 1971, he graduated with an engineering degree from École Polytechnique after which he joined his father’s civil engineering company, Ferret-Savinel, becoming CEO in 1977 and finally, president in 1979

Meanwhile, in 1978, when the Boussac group
(owned by Marcel Boussac who financially backed Christian Dior in it’s early stages) went into bankruptcy, their assets, including Dior’s, were purchased by the Willot group.

In 1981, however, when the Willot group went into bankruptcy, Bernard Arnault stepped in and he and his investment group purchased the assets of Dior in 1984.

By 1985, he became the chairman, CEO and managing director of Dior, thus bringing the company’s financial stability back to normal.

In 1988, Dior took a 32% stake in the shares
of LVMH, thereby, creating the foundation for what would become the world’s leading luxury goods companies.

Today, he is the majority shareholder as well as the chairman and CEO of LVMH. His vision of combining/integrating all the fashion or luxury brands under one group has inspired many other companies to do the same.

In late 2012, he was made an Honorary Knight Commander of the Most Excellent OBE (Order of the British Empire)
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