Louis Vuitton Case Review

Suzanne Clements

Jose Rocha

Professor Lee

GM 105 Section 5

9 October 2014

Louis Vuitton

Louis Vuitton was first founded in 1854 and it was known for its production of trunks. Louis Vuitton Malletier, the founder of LV came up with the design of the trunk and he would later innovate his design to make it difficult for competitors to copy. After Vuitton’s death came his son Georges Vuitton to inherit the company. Georges was more focused on innovation, for example he invented the five number combination lock that is used even today. He also was responsible for designing hundred of handbags and moved the company into the handbag business. World War II brought an end to the expansion of LV, factories were closed and LV’s international distribution contracts were terminated. By 1977 Renee Vuitton, the family’s matriarch, brought her son-in-law Henri Racamier to lead the business. Racamier’s goal was to keep all the profits in-house, he noticed that most of the profits were going to merchants. By bypassing the merchants and opening company-owned stores all the profits will remain in-house. Racamier pushed the LV brand aggressively products were diversified, manufacturing expanded and new technologies were introduced. By 1987, Racamier agreed to merge with Moet Hennessy to form the Louis Vuitton Moet Hennessy (LVMH) group. Later relationships between these two companies deteriorated and with disagreements and legal battles over how to run the company. Recamier approached Bernard Arnault to help the latter boost his position against the Moet and Hennessy families. Arnault instead of helping Racamier, he backstabbed him and he rapidly acquired 45 percent controlling stake of LVMH and he even gathered support from the Moet and Hennessy families.

How has LVMH been performing? How does its performance compare to that of its competitors?

LVMH group has been performing very well. The group has been successful because it focuses on many industries. For example, LVMH...