Despite the adversities he faced since he was little, through persistence and ingenuity, Louis Vuitton created one of the most recognized companies worldwide and whose legacy has endured for nearly 170 years. We tell you the story of this successful business that was family-owned until the arrival of Bernard Arnaultas well as the lessons learned from this case to protect the legacy.
Who was the founder of Louis Vuitton?
In 1821, in Anchay, France, Louis Vuitton was born, the product of the marriage between Xavier Vuitton, a farmer, and Corinne Vuitton, a milliner. From his childhood, the little boy learned the value of work because his days were spent in the field doing tasks such as taking care of animals. However, after the death of his parents and being left in the care of his stepmother, who made his life impossible, at the age of 13 the young man decided to run away to go to Paris.
With the firm intention of having a better life, the teenager set out on foot and without resources to the French capital, a fact that took him nearly two years to achieve. Throughout the approximately 417 kilometers that he traveled, he had several jobs that not only helped him survive, but also gave him tools that would later help him fulfill his dream.
He arrived in Paris in the 19th century, when the country was experiencing the transformations of the industrial revolution. Without a single coin, Louis Vuitton lived on the streets until he was hired as an apprentice by Monsieur Marechal, owner of a successful workshop specializing in the manufacture of boxes.
It was this that allowed him to find a roof over his head and, furthermore, begin to make a name for himself thanks to his skills.
His reputation reached the ears of the Empress of France, Eugenia de Montijo, who hired him to design her suitcases. This fact, in addition to giving him popularity, gave him the knowledge that would later become a fundamental part of the Louis Vuitton brand: treatment of luxury products and thus meeting the expectations of high society.
The rise of a legendary business
Over time he was able to become independent and that is how Louis Vuitton became the owner of his own business. He opened his first workshop in 1854, which saw him begin a revolution in the luggage industry. Its innovations began with two significant modifications: the rectangular design and no longer a curved lid that made it easier to stack the suitcases. Additionally, the use of canvas to reduce the weight and stench of leather, as well as being water repellent.
The success and demand was such that in 1859 they had to move to the outskirts of Paris to expand their workshop and have the necessary production capacity. Then, with their son Georges involved in the family business, they implemented and patented a new lock that could only be opened with a unique and numbered key, thus providing greater security to the suitcases.
Although the business was going from strength to strength, the Franco-Prussian War arrived and forced them to close. They lost almost everything, as their workshops were destroyed and looted. However, the crisis was brief and a year later, they reopened their doors with a branch on one of the most exclusive streets in the city: 1 Rue Scrib.
It was also at this time where the business crossed borders. They received orders from various parts of the world and this even led them to open a Louis Vuitton store in London. But at the same time, plagiarism arose. To combat this, they implemented the famous “LV” monogram and later, in honor of the founder, it would be accompanied by diamonds, circles and flowers.
These reasons persist to this day.
The company after the founder
After his death from unknown causes at age 72 in 1892, the company passed into the hands of Georges Vuitton. The heir had the vision of traveling to the United States to continue the expansion and market in department stores.
The family company continued to grow and expand its catalog, which, in addition to suitcases, also included bags for personal use. They also created a conveyor designed specifically for bottles, something very useful for French winegrowers.
The Second World War was another obstacle for the company which, at that time, was headed by Gaston-Louis, a descendant of Georges who died in 1936. During that period they had to close stores and factories. Then, with the help of his children, the third and fourth generations of Vuitton got to work to make up for lost time, continue creating designs and continue Louis’ legacy.
Among the most notable things that were done at this time was the use of leather because, due to its flexibility, it could be used in more products such as wallets, bags or purses.
When Gaston died in 1970, his children faced stagnation in the business due to the decline in popularity of rigid materials such as leather. Furthermore, their divided perspectives on how to run the company led them to make the decision to ask his brother-in-law, Henri Serge Racamier, to take control.
The end of the family business, who is Bernard Arnault?
Racamier significantly changed the business model. Firstly, it went from wholesale to retail trade, which led to an increase in sales, which in a period of 6 years went from 20 million dollars to 260 million dollars. On the other hand, he took the company public and all the shares were sold.
The opening of stores around the world catapulted the success of the company, which by 1987 reached record sales of nearly 1 billion dollars. The next thing happened: the merger with the cognac and champagne producer, Moët Hennessy, to form the luxury products conglomerate LVMH.
What seemed like a great advance was the end of the family business. After disputes with Alain Chevalier, CEO of Moët Hennessy, Henri turned to Bernard Arnault to become his ally. However, the current president and CEO of LVMH had other intentions and secretly bought a majority stake for 45% of the shares.
The last family member in charge
With the support of the Moët Hennessy family, Arnault won the legal battle in court and so, in 1990, Henri Serge Racamier was expelled from the board of directors of the LVMH conglomerate. He thus became the last of the family in charge of the company.
However, successors to the Vuitton legacy, such as Pierre-Louis and Benoît-Louis, are still part of the company in other roles.
Bernard Arnault is today the second richest person in the world and whose net worth as of February of this year is estimated to be around $193 billion. With him already in charge of the LVHM conglomerate and with Yves Carcelle as president and CEO of Louis Vuitton, they hired designers to create new bags using the monogram. Together with Marc Jacobs, they launched their first clothing collection in 1997.
How to protect your family legacy?
One bad decision can end a family legacy that took decades to build, or more than a century in the case of Louis Vuitton. These are some of the keys that this story leaves us to protect that business and ensure that it continues in the hands of the following generations:
- Trusted allies: If you plan to add people from outside the company, make sure that they are completely trustworthy to avoid any “dirty plays” that compromise years of work.
- Protection clauses: If your company is public, it is essential to establish clauses that limit the purchase and sale of capital to third parties.
- Professionalization: Especially when going public or carrying out mergers, it is necessary that the board of directors have all the necessary preparation so that an error or “hazing” is the end of the family business.
The story of the young visionary, Louis Vuitton, is an example for those aspiring entrepreneurs.
Furthermore, your company is a reference for people in charge of a family business. Consider good practices and failures to achieve a successful company that lasts for generations.
Daniela Ramos Communicator and mother. With 10 years of experience, I have been able to tell stories related to business, personal finances, work culture, entrepreneurship and technology.