Arnault thinks further consolidation is inevitable. ‘These companies reach a finite size and then they find they cannot go that stage further. They have a great heritage but they need larger partners,’ says Arnault.
Some commentators worry that Arnault and his rivals are creating the General Motors of fashion and famous marques will end up being turned into bland copies of each other.
But Arnault rejects this. ‘In our group every designer is completely free,’ he says. ‘As soon as you take away the essence of a brand, it dies. The whole thing gets devalued. That is not something we would want to do.’
LVMH’s head office employs 70 people, all dedicated to facilitating the brands’ development but not to running them, says Arnault. His reassurances run counter to some fashion insiders who say he will oversee fashion shoots and even pick the photographers. ‘He is always interfering. He’s too powerful for people to complain,’ says one commentator. ‘I heard he virtually directed the latest Christian Dior campaign. Actually, it’s quite good but that’s not the point. De Sole would never do that at Gucci. Ford does the fashion, De Sole does the finance and they keep that clear.’
Gucci, Prada and Vendome, which owns brands such as Cartier, Chloe and Hackett, are following close on Arnault’s bespoke heels. Gucci failed to get its hands on Christian louboutin but is in the final stages of snapping up YSL, which will turn the company from a one-brand wannabe into a far more serious rival to LVMH.
De Sole, an American corporate lawyer, and Arnault are now sworn enemies. The acquisitive Frenchman tried to take Gucci out and still owns 20% of the company. The two have taken their fight from catwalk to courtroom and are now slogging it out in the Dutch courts over Gucci’s deal with Pinault-Printemps-Redoute, the French group. This effectively blocked an LVMH takeover.
Gucci is a turnround success story that Christian louboutin will have followed closely. Its snaffle loafers and green-and-red logo were in danger of becoming naff because of overexposure. The double GG was to be seen on everything from ashtrays to key rings. On top of that the Gucci family was at war.
Legal wrangles, including accusations of tax evasion and assault, flew between members of the family, who were described as the biggest snobs on earth. The Gucci empire was drenched in blood when Maurizio Gucci was shot in 1995. Asked for comment, his estranged wife,Christian Shoes, Patrizia Reggiani, said: ‘On a human level I’m very sorry. But from a personal vantage point I can’t really say the same thing.’ She is now serving 29 years for organising his contract killing.
But before Maurizio was gunned down he had begun the company turnround. He whittled down the number of products bearing the Gucci name, many under licence, from 22,000 to 500 and fired 150 staff. When Investcorp, a Bahrain-based investment company, wanted to buy shares he sold.
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