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LVMH Pulls it Out of the Bag!

Louis Vuitton Moet HennessyLVMH, Louis-Vuitton-Moet-Hennessy, one of the most prestigious names in handbags (Louis Vuitton), fashion (Dior), perfume (Guerlain) and alcohol (Moet) expanded its already impressive empire last week by buying a 51% majority stake in the Italian jeweller’s, Bulgari.

Perhaps after LMVH’s recent bout of bad publicity this high profile acquisition will put the sparkle back into Bernard Arnault’s empire. Already the richest man in Europe, Arnault will now own the world’s third largest jeweler in one of the most expensive deals the industry has ever seen.

Just last week LVMH’s reputation was called into disrepute as Christian Dior’s name, one of LVMH’s founding members, was dragged through the mud. John Galliano, It seemed likely that LVMH would be in need of some reputation management after Dior’s Chief Designer was captured on film saying that he ‘loved Hitler’ and telling a group of women that they would have been gassed in Nazi Germany.

This video was leaked to the media and unsurprisingly sparked uproar. There was even further backlash for the brand when Oscar winner Natalie Portman refused to continue being the face of Miss Dior Cherie if Galliano continued to work at the fashion house.

There is no denying that LVMH was in need of some serious crisis management in order to minimize the damage of Galliano’s anti-Semitic rant. Arnault’s skilled team of PR consultants have managed to turn the catastrophe around and court media relations: Arnault fired Galliano and a few days later announced the exciting news of the Bulgari acquisition, rumoured to be worth €4 billion.

This acquisition of a company that has always positioned itself as ‘unsaleable’ boosted LVMH’s reputation and media relations. Shares in other luxury good companies soared this week as a result of the acquisition as investors continue to speculate which company LVMH will seek to acquire next.

However, one company that was not caught up in the excitement was Hermes who fought a bitter takeover battle with LVMH last year. Hermes CEO Patrick Thomas reaffirmed his distaste for LVMH this week by referring to LVMH’s attempts to takeover Hermes as a ‘rape’ and stating that he was not interested in a collaborating with the luxury goods empire despite their 20.2% stake in Hermes.

It seems that after this damaging comment by Thomas, Arnault may be in need of some entrepreneurial pr and reputation management after all!

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Written by smith123

Posted by on Apr 1 2011. Filed under Featured, Style. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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