Luxury Goods Are No Longer Hot. Where Will The Hermes Go?

LV runs counter to Hermes.

In the eyes of LVMH chairman Bernard Arnott, luxury is nothing more than a business; but in dumei, elegance is a power.

A perfect ambush! Bernard Arnott, chairman of LVMH, has torn down 17.1% of Hermes's shares before becoming a leader, and became the biggest shareholder in addition to the Hermes family in BernardArnault.

The Hermes family was kept in the dark until he announced the news himself.

Apparently, in the eyes of Patrick Thomas, chief executive of Hermes, such a takeover is "not friendly". PatrickThomas

He resisted his anger and asked Arnott to "quit voluntarily". He repeatedly stressed that the Hermes family had "absolute solidarity and unity of desire", holding more than 70% of the company's shares, and the anti takeover strategy and numerous "poison pill" schemes.

Arnott, however, told the media with great interest that LVMH would not seek hostile takeovers, nor would he seek seats for Hermes' board of directors. "We will respect the independence of the Hermes family and contribute to the preservation of their family and French characteristics."

It sounds so familiar.

He once said the same thing more than once, and few could escape Arnott's palm.

The pride of those independent brands was ruthlessly crushed by him, and was eventually labelled with Arnott's flaunting symbol, and became his profit tool.

But this is Hermes, just like Helen who triggered the Troy war.

In the eyes of the French, it is the living fossil left behind in the carriage age. It is the link between yesterday and yesterday.

And LVMH's strong capital and over commercialization are enough to worry about the last defense line of luxury handcralism under the background of big industry. Have we been hiding from Arnott?

You know, Arnott doesn't care about the Birkin crocodile leather of Hermes, which is how many hours the craftsman spends polishing, and he doesn't know the difference between the knots and the usual screws. He also holds convertible derivatives, and claims that he will continue to acquire Hermes shares when necessary, depending on the market environment.

Arnott, a shark in the luxury industry, believes in a simple business belief that if you look at a beautiful woman, you can get her anywhere. You have money anyway.

Since 1987, LVMH has made 62 acquisitions, holding 74 companies, engulfing France's Dior (Dior), Givenchy, CELINE (Celine), Italy's Fendi (Fendi), and Spain's Roy Wei (Loewe).

Born in Ruhr, a construction business family in the northern industrial city of France, Arnott has never been a fashion man, but a businessman.

His business practices are full of American style.

Arnott's own explanation is, "I look at things as they are, rather than wishful thinking, even in our industry."

Before 1980s, business in France was a gentleman's game, cautious and courteous.

But Arnott doesn't care about either. He is a new breed of French entrepreneur. His goal is simple. To win one victory after another, everything can be reckless, decisive, and not afraid of any conflict or condemnation.

In 1987, he took a lot of promises to the founder Cecile Withena (CelineVipiana) when he saw luxury women's clothing and leather goods brand Celine.

At that time, vipna was in charge of designing, and her husband was in charge of Accounting - just like any typical family brand in the past era.

Their annual turnover is only $20 million, and the profit is $5 million.

In fact, in overseas markets, such as Japan, Celine does not need to spend too much energy to get more lucrative profits.

When Arnott found vpna wanted to buy Celine, she was walking into her ears, and their son had no interest in taking over the family business.

Arnott suggested that after taking over Celine, they will remain responsible for the operation of the company. As the founder of the brand, vipna still regards Celine as her treasure.

So, they agreed to sell 2/3 of the company's shares to Arnott.

But in the months after the paction was completed, Vienna was without a sign.

Be "please" away.

Vipna once told the media that one day, Arnott's manager called them, "old man, old lady, you stay at home."

If necessary, we will call you. "

The vickenna couple, who had been battered by the psychological frustration, soon sold the remaining 1/3 of their shares to Arnott. In this way, Arnott had another collection in his brand display cabinet.

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After staring at the prey, Arnott's usual trick was to sneak in secretly, split his opponent, and then conquer it with the thunder.

And before the last thunderstorm, his patience was always good enough to let others forget his ambition.

Of course, just like this shark in a market, sometimes it can't be all right.

In 1991, Arnott studied in the long run.

In order to fight against Arnott, TomFord, a star designer who reinvigorate the Gucci brand, has thrown a "Tom bomb". He has joined a contract with the company. If Arnott takes charge of Gucci, he will be able to resign immediately. "TomFord"

But Arnott will not stop for a short time. In his view, if we get 15% more shares, we can get the biggest competitor of LV.

Then he began to turn to other shareholders of Gucci at a high price.

By March 19, 1999, things had reached the most critical point for Gucci.

For this reason, he was president of Gucci.

He found Arnott's dead rival, the boss of Paris Spring Department Store (PPR) and the financier Francke (rancoisPinault).

Under the guiding principle of "no one can sell to Arnott," Pinault took the opportunity to take up 40% of the Gucci shares than Arnott's low price of 10 US dollars, just like the white warrior who protected Gucci, and forced Arnott away.

This is the first time that Arnott has become a loser in his own game, and its significance is far-reaching.

PPR has vertically integrated it after buying Gucci. After forming Gucci group, it bought celebrities such as Balenciaga, Boucheron and Boucheron.

If LVMH is still ahead of the industry, Arnott is now facing a real opponent.

The golden age of weaving dreams, but even if Gucci falls into PPR's pocket, its fate is not so good.

PPR is essentially a luxury monster like LVMH. It takes the same product strategy as LVMH, the same marketing tool, and the same way to reduce costs and improve production efficiency.

In fact, Tom Ford and de Sauret also left Gucci in 2004 because PPR cancelled their autonomy.

If anything in the luxury industry has changed over the past 30 years, luxury goods giants are increasingly intent on pursuing profits.

In the past, when these brands were still dominated by designers, of course, they also care about profitability, but they prefer to introduce the best products. Now, this is more like a symbolic show. The tycoons have shifted their focus from what these products themselves are to what they represent.

In order to do this, as Arnott himself said, they emphasized the brand's immortality by publicized the history and tradition of the company.

Then, he will hire a fashionable, hot young designer to give the brand sexy and modern personality, simplify the name (even ChristianDior has been changed to Dior, Burberry 's has removed that "s"), then put the label on every product from handbag to sunglasses, and continue to spend heavily on advertising, spreading the new Gospel of luxury to the public.

Since 1990, Arnott began to employ Eve Casali (YvesCarcelle) as the chairman and CEO of LV.

In order to re polish the gold lettered signboard, they launched a series of marketing campaigns to make the story of LV legendary: they launched the LV classic car tour exhibition to attract the public's attention; invited reporters to visit the leather furniture workshop of Ashni Jerzy Ho Asni (RES) in the suburb of Paris; and launched Gorbachev, Agassi, Graf's political and sports stars to advertise, to implant people's legendary reverie about carrying LV suitcase to explore the journey of life.

Once the dream is made up, the next step is to introduce a subversive design to grab the headlines of the media with crazy works.

Arno hired MarcJacobs, who is a slovenly, bohemian, with a deep New York guest culture, as the artistic director of LV.

Jacobs shocked the fashion industry with a series of ragged designs called "grunge", but what can it bring to the middle class and dignified LV women's clothing? {page_break}

This is the key to the problem! It happens that, when John Galiano, a British designer, he hired from JohnGalliano, pferred from Givenchy to Dior, the punk supremacy of California's wildly heavy metal and leather products and the postmodern passion that had been unleash in the ragged Black Costume forced many of the senior women's wear customers to go to more traditional boutiques like YSL and Chanel (Chanel).

Nan Kempner, a consultant at the New York society and a number of fashion magazines, once said, "when I was sitting on the Dior fashion show, the first lady of France, Bernade, was NanKempner.

Chirac and former first lady Claude.

Pidou was sitting next to me. They looked like a cold fish on their faces. They could not believe their eyes: the brand that they had patronized for a long time turned out to be like that! What are those clothes that can be worn?!

But Arnott didn't care about that.

More than 1000 journalists were present at the scene. The flash of the camera sent the scene to every corner of the world. The photos of these clothes will also appear in the selection of fashion magazines throughout the year.

Well, maybe some designs may lead to bad reviews, but as Arnott said, "the value of a comment is not whether it is praise or derogatory, but whether it appears in the headlines."

It is this "headline effect" that allows customers of the next generation of LV or Dior to buy fashionable things again and again: Sales of perfume and handbags have increased two or three times, far exceeding the losses in women's clothing business.

Yes, when you can get the whole mass market, all the disputes before are no longer a problem.

People can buy a pair of affordable Dior sunglasses at shopping centers, airport terminals, and even retail outlets in Lenscrafters, and feel the aura of Arnott's gospel. Of course, this will also make LVMH's profits soar.

Persistence and loss, of course, are purely understandable from a commercial point of view.

Arnott's skillful wrist has brought the luxury earning ability to the extreme. Arnott, who is the richest man in Europe, has almost doubled his fortune this year by borrowing 57% of LVMH shares.

But this has made the luxury industry that once used to yearn for the good things like the monopoly game. The art of boutique is no longer the focus. Maybe that is the final consideration. People see more than two words: buying and selling.

In 2007, when Gong Li was stunning the red Valentino evening dress at the opening ceremony of the sixtieth Nash Film Festival, Britain's Permira, the largest private capital in Europe, quietly bought a 29.6% stake in VFG (ValentinoFashionGroup) from the Marzotto family in Italy. Earlier, the private equity fund in London bought JilSander from Prada, ApaxPartners got the revenue from TommyHilfiger, and TowerBrookCapitalPartners bought it.

But those capitalists who only have numbers in the picture do know what is boutique? Genius designers find that pride, named after their names, is increasingly being subservient to the retail and marketing strategies of professional managers, and building efficient supply chains to ensure that products are put on the shelves in time and get to consumers has become as important as product design itself.

This world has long been denied them.

As Alexander Macqueen, former designer of Givenchy, said, "in your eyes, you are just a commodity," AlexanderMcQueen said.

That's why those who really love fine products are so worried about Hermes's future.

Hermes is a brand that tries to maintain the luxury of handcrafted tradition of luxury goods. It is not a commodity to show off, but represents the handicraft itself and a kind of elegance that has been honed through time.

This is not just about its persistence in the traditional traditions of silk, leather, harness, enamel porcelain, but when it chooses to expand its business, it also chooses only those who follow the rules of handcraft as a treasure -- John Lobo's shoes, JohnLobb, Saint-Louis and Puiforcat.

And the philosophy behind these actions is exactly what will happen.

When Jean-LouisDumas, the soul of Luis Dumas, died in Paris in May this year, the family seems to be doomed - there are too many family members and eventually some people want to cash in.

According to the current valuation, 0.1% of Hermes shares are worth 18 million euros.

What is even more frightening is that a person like Arnott is staring at a force that is totally against the Hermes gene.

This force is strong and tough, and has overturned everything in the past 30 years.

Luxury goods are becoming more and more accessible. Everything is too standardized. The old customers are no longer able to feel the soul of the product that the brand founder has given them.

Just like Tom.

Ford said, "it's like McDonald's.

Well, they are not cheap things, but they are exactly the same as the hamburgers you bought at every McDonald's. you also see the same handbags in every LV store.

This loss is also written in the face of Anna Wintour, the female czar of the fashion world and editor in chief of the American edition of VOGUE. She complained, "shopping in Beverly Hills in the past is a long and exciting thing, but now it's just another shopping mall." (AnnaWintour)

Globalization, mass market, low price products...

The whole luxury industry has become what it looks like now.

But no matter