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There is a lot to say about taste – not usually about the price of luxury handbags. Who pulls the strings at Edel-Marken and what role do personal egos play?
Photo: AFP
Paris – Mirror, mirror on the wall, which is the most beautiful, the largest and at the same time the most profitable of the country? This issue currently haunts the French luxury market, whose growth rates are skyrocketing, as is the ego of its protagonists. The market leader, Louis Vuitton, has achieved a turnover of 9.3 billion euros last year in its suitcases and leather bags. He accompanies the parent company LVMH in the largest market capitalization of France. "Vuitton", as it says among the insiders, but now gets the competition: Gucci claims to enter in just two years, ten billion euros in turnover.
The flamboyant Baroque, the Italian brand Kering belonging to the Italian brand Kool, reached only 6.2 billion dollars last year. But it recorded a growth of 42%, the Keringvorsteher François-Henri Pinault described as "phenomenal". The husband of actress Salma Hayek reinforces Gucci's online appearance and thus attracts the coveted "Millenials" from the United States to the Far East, that is to say young consumers born at the turn of the millennium. For them, luxury should no longer be a luxury. The duel between the two market leaders Vuitton and Gucci not only powers their two parent companies – it is helping the industry to an unprecedented boom, as Bain & Co. consultants worldwide at seven percent a year.
The engine behind the Vuitton vs. Vuitton duel. However, Gucci is neither money nor glamor – it is also a lot of vanities: that Gucci just takes his rival to the scale, has his deeper reason in the claim of leadership of two discreet owners, now with gray skin. LVMH with Vuitton belongs to Bernard Arnault, the richest Frenchman with 73 billion euros of private fortune. Kering with Gucci is controlled by François Pinault – the father of François-Henri – who, according to the Parisian magazine Challenges brings 31 billion euros on the scale of the currency. The two luxury magnates are not only alike: they both have dozens of brands in their luxury lineup, and both fund their profits in the art, and sometimes even among the same artists as Jeff Koons.
Arnault presents his masterpieces of contemporary art in the spectacular "Fondation Louis Vuitton" of the forest of the city of Paris, inaugurated in 2014; Pinault installed his museum in 2005 in Venice in the famous Palazzo Grassi. The rivalry of the two alpha animals is obviously profound. Although they have already helped each other through their impressive art collections to silence the industry, they talked about their embarrassing mirrors war; but when it comes to business, they are racing between their main brands Vuitton and Gucci like racehorses.
Now, however, a third gold ass interferes in the race. Chanel, a third-generation family-owned business based on eccentric fashion designer Coco Chanel, released business figures from scratch in June. The two owners of nearly 70 years, Alain and Gérard Wertheimer – whose assets each cost 20 billion euros – had denied for decades any idea. According to her, the numbers should not constitute Chanel, but mythical products such as perfume no. 5, that Marilyn Monroe claimed to be the only nightgown. Or as the "little black" that Coco Chanel had invented, and of course, as the creations of Karl Lagerfeld, the long-time creator of Chanel.
And lo and behold, the unobtrusive brand surprised the financial world with a turnover of 8.6 billion euros, a growth of 11% and a profit of 1.5 billion dollars. euros. Remember, without an IPO, even without Internet presence for important sectors such as fashion and leather goods. Chanel wants to stay exclusive, not as filthy as Gucci or choke like Vuitton. Why do the Wertheimers publish the annual balance? Certainly not easy to take part in the upscale vanity fair – they leave to Arnault and Pinault. The official statement is that "the culture of discretion" is no longer up to date.
The new rich Arnault and Pinault, with their conglomerates LVMH and Kering, are today the largest and most haughty in the industry. But Chanel and Hermes achieve higher profitability. And it's the real Parisian chic.
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