Louis Vuitton is the most valuable luxury fashion brand in the world. Its CEO, Bernard Arnault, is
also the second-wealthiest man on the planet with a net worth of around $180 billion dollars.
Looking at the success of today, you would never guess that the company was started
by a man who was homeless during his teenage years, had no education, and slept in a forest.
Louis Vuitton is a true rags-to-riches story. But the company would also be the subject of a
hostile takeover, countless lawsuits, and a host of other controversies.
This is the insane story of Louis Vuttion,
and how a tiny family business evolved into one of the most powerful brands in the world.
Louis Vuitton
was born in 1821 and grew up working on his family farm in France, in a small village called Anchay
in the middle of nowhere. They had no electricity, and no running water. Louis’ father Xavier,
was a miller and farmer while his mother Corrine made hats to help make some extra cash.
There are no records showing that Louis ever received an education. The nearest
school was in a village 6 miles away, and it’s believed he worked full-time on the
family farm without learning how to read or write. Louis would have been working in the
fields every day from dusk till dawn, just to make enough food to help feed his family.
Needless to say, the Vuittons were struggling financially, and young Louis was born into
a situation that should have doomed him from ever having a bright future.
And then, things got much worse. Louis’ mother died when he was just 10 years old,
and his father quickly remarried another woman. But Louis’ new step-mother was
incredibly controlling and manipulative towards him - and he constantly got
into fights with her. And so, when he was just 13 years old, he ran away from home,
with plans to go to Paris. He slipped out in the middle of the night without even saying “goodbye”.
There was just one problem- Paris was 225 miles away, and Louis had no money or food. So he was
forced to walk along dirt roads. Most nights, he slept in the woods with an empty stomach and
just a cloak to keep him warm. Every time he ran into a new village, he would do odd jobs
in exchange for food or coins. However, there was never enough money left over for housing.
So he continued to sleep in the woods, or wherever he could find shelter for the night.
Through these various odd jobs, Louis was able to pick up skills from craftsmen, and he learned how
to work with metal, stone, fabric, and wood. This collection of various skills would later transform
his life. But at this rate, travel was incredibly slow. It took him 3 years to reach Paris.
Not long after he arrived in Paris, Louis was able to find work as an apprentice box
maker and packer. Box makers would make custom sized boxes for clients,
as well as pack and unpack them whenever a client was about to go on a trip. This job allowed him
to meet many people from the upper class who were looking for custom-made luggage for their travels.
Louis worked here for several years learning the craft and working as hard as he could.
In fact in 1851, The Empress of France ended up being a customer,
and took notice of his fine craftsmanship. She appointed him as her personal box maker
and packer. For most box makers, this would be the highest honor anyone would ever achieve
in their career. Louis had gone from being a homeless teenager with nothing to his name to
now working a prestigious job among royalty. That was a massive achievement on its own.
But Louis Vuitton had an even bigger vision for his future. After getting married when he was 33,
Louis used his savings to start his own business,
and opened up his own box-making workshop in Paris, to begin selling his own products.
You see, Louis had noticed a major flaw in the luggage of the day. All
of the boxes were made of leather and had rounded dome shaped tops,
so that rain would roll off the top of the luggage. The major issue was
that it was impossible to stack them, so packers had to carry the boxes one by one.
Louis began experimenting with different materials to use instead,
and found that canvas was lighter, durable and more water resistant,
which meant the trunks could have flat tops instead. This made everything more efficient,
as it was now possible to stack them up in a pile and pack multiple trunks at one time, and
they were also more compact. Louis’ new suitcase design brought on the dawn of modern-day luggage.
At this point, Louis had already built up his professional reputation,
as well as connections in the upper class. So once he launched his new line of luggage,
it was immediately a huge success. He even created a Louis Vuitton catalog so that customers could
look at products that he had available, and have them made before sending it to their homes.
Within 2 years of creating his new suitcases,
they were considered an elegant and must have accessory amongst the wealthy, as it became a
status symbol. And the brand had become so popular that he was receiving orders from
around the world. He even began receiving orders from royals as far away as Egypt.
In 1859, Louis made enough profit to hire a team of craftsmen to help fulfill his
orders. He opened a new workshop outside of Paris, where he hired 20 employees.
Around that time, more and more people were beginning to travel by train and boat. So
the number of his potential customers increased exponentially. Traveling was no longer a hobby
exclusive to the rich. People from all walks of life were now in need of high-quality luggage.
It would seem as though Louis had made it, and would go on to succeed for the rest of his life.
Unfortunately, that was not the case. France was heading to war,
and tragedy was about to strike once again for Louis Vuitton.
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In 1870, when Louis was 49 years old, The Franco-Prussian War broke out. Louis had
to flee his home and live in a cramped shelter with thousands of others. Food
supplies were extremely low, and he feared for his life.
When Louis could finally return to his shop in 1871, everything was destroyed. Windows
were smashed, equipment was stolen, and he had lost everything he worked so hard for.
But instead of giving up, he decided to use his savings to rebuild the
business - and vowed that it would be even better than it was before.
With so many people displaced from the war, there were far more empty shops available
for rent throughout the city. So Louis Vuitton took advantage of this by opening his new shop
in a much more wealthy aristocratic location in Paris - It was perfect,
because it was right next to the railway station, and The Grand Hotel,
so travelers who needed new luggage didn’t need to go far to find the Louis Vuitton store.
By 1872, he came out with a brand new design- luggage made of a beige canvas
with stripes. This became incredibly popular, and people loved showing off
the modern style. Many other brands tried to copy his style, but his bags were such
ridiculously high quality, that customers still preferred a true Louis Vuitton bag.
For the next 20 years, Louis continued to work at this new shop in Paris,
until his death when he was 70 years old.
But his legacy was able to live on through his son Georges, who took over the family business.
Georges sought out to expand the brand globally, such as opening a popular store in London.
At this point, Louis Vuttion luggage was so popular that many other boxmakers were
beginning to make counterfeits. So in 1896, Georges Vuitton brought out the
now-iconic LV monogram to make it harder to copy. The LV were his father’s initials,
in honor of the man who started the brand. He also came up with the idea of adding a
revolutionary new lock on the trunks that would make it impossible for thieves to pick them.
By the year 1900, the company had 100 employees, and it continued to
grow year after year. All of the employees were trained for a very long time in order
to become expert box makers. Even to this day, Louis Vuitton employees train for 18
months to 2 years before they’re trusted to make one of the products on their own.
The company also began to expand into a whole new line of products because of another fashion icon-
Coco Chanel. In 1925, she commissioned a small dome-shaped handbag. At first,
this was a design that she personally came up with, and it was just for her. However,
it would go on to be mass-produced, and it was given the name “Alma”. This was massively
successful, so Louis Vuitton began to make more small leather bags, like the “Keepall”,
“Speedy”, and “Noe”. Before Louis Vutton, handbags were often seen as quite inelegant and bulky,
but the company played a big role in them being seen as much more fashionable.
Georges Vuitton died in 1936, and the company was passed over to his son
Gaston-Louis. However, Gaston took over the company at a very difficult time,
because in just a few years, France was once again heading to war.
During World War 2, contracts were canceled, and Gaston was forced to
shut down the Louis Vuitton factory. Paris was under siege once again. The only way
Gaston Vuitton could save the business was to collaborate with Nazi Germany.
An author named Stephanie Bonvicini wrote a book called Louis Vuitton,
A French Saga. During her research of the company archives, she asked if she could see
records from World War 2. Almost immediately, the representatives from the company tried to
avoid showing her the information. They claimed that all of the documents from 1930 to 1945 were
destroyed in a fire. But after doing a lot of digging into other historic documents,
Stephanie discovered that Louis Vuitton was able to open a glamorous ground-floor shop front in
the Hotel du Parc throughout the Nazi Regime, as they collaborated with them. Meanwhile, several
other brands were forced to shut down, because they had refused to cooperate with the Nazis.
Clearly, the company was ashamed of this part of their history. But they would argue Gaston
did what he needed to do in order for the company to survive. Other fashion designers,
like Coco Chanel, also collaborated with the Nazis in order to make sure her business in
Paris was not destroyed. If it were not for their choice to work with the enemy,
their brands would likely no longer be around today.
When Gaston passed away in 1970, his son-in-law Henry Racamier took over managing
the Louis Vuitton brand. So we’re now onto the fourth generation. But unlike his ancestors,
Henry already had a lot of business experience from a company he’d run before,
so when he took over Louis Vuitton, he was able to elevate the brand to a whole new level.
Henry began making major changes to the Louis Vuitton brand in order to
grow it from a family-owned company to the massive corporation that it is
today. He switched Louis Vuitton’s business model from wholesale to retail. By 1978,
he expanded into many other countries, including Japan. Over the course of 6 years,
and accounting for modern inflation, sales went from $20 million to $260 million dollars.
And so in 1984, Henry decided to take the company public. Louis Vuitton sold out the one million
shares, valued at $63.63 each. Henry took this momentum and influx of cash and began opening
more stores all across the globe. By 1987, Louis Vuitton reached $1 billion in sales. It was far
beyond what young Louis could have ever dreamed of when he first opened his store in Paris.
Henry also decided that the company should combine with Moet Hennessy, a luxury drinks company which
produced champagne and cognac. And together, they formed a new luxury conglomerate called LVMH.
In theory, by joining together, it would allow them to pool resources and expand even faster.
Unfortunately after the merger, Henry didn’t end up getting along well with the president of Moet
Hennessy. So Henry asked a successful property developer he knew named Bernard Arnault to help
him manage the situation. Unfortunately, inviting him in as an investor would
backfire in a huge way. Bernard secretly bought 43% of the shares of Louis Vuitton,
and got support from the Moet and Hennessy families to gain more power in LVMH.
Henry felt he’d been betrayed by the man he’d brought in to help him, and so took Bernard to
court, demanding that he should no longer have the majority stake in Louis Vuitton.
But the courts ultimately sided with Bernard. Henry was so angry about being backstabbed by
his friend that he decided to quit working for Louis Vuitton completely. Now, for the first
time in nearly 100 years, no one from the Vuitton family was involved with the brand.
After all of this drama of Bernard’s hostile takeover, sales of Louis Vuitton began to
crash. Journalists were no longer covering the brand. For a while, it looked as though
the company might fail. However, Bernard knew how to turn the fortune of the company around.
Louis Vuitton was able to make a comeback when it began to collaborate with several
fashion designers during its 100th anniversary collection. Big names
like Vivienne Westwood and Isaac Mizrah all created their own take on the iconic
LV monogram logo. They created products that customers had never seen before,
and people were once again trying to get their hands on a Louis Vuitton bag.
Ultimately, Bernard’s investment in Louis Vuitton paid off in a massive way. He is now the CEO of
LVMH. In 2021, Forbes officially dubbed him the richest man in the world with a net worth
of over $180 billion. Now of course as stock prices move these rich list rankings change,
but he’s almost always in the top 5 richest people in the world.
However, out of the wealthiest people like Bezos, Musk, Gates, Buffet, - Bernard Arnault is
definitely the least known as he prefers to stay out of the spotlight. What we do know,
is he has such a ruthless reputation in business, he is known as the ‘wolf in cashmere’,
which is why today LVMH has over 70 different brands it owns, through all
of the acquisitions and mergers Bernard has pulled off. This one company owns so many of
the most luxurious brands in the world. And yet it all started with a broke homeless teenager.
In the modern world, Louis Vuitton continued to expand its brand with new, colorful styles that
resonated with a younger audience. In 1997, Marc Jacobs became the Creative Director. He designed
the first ready-to-wear line, and also created the popular Monogram Vernis line of handbags.
Marc Jacobs also expanded LV into watches, jewelry, and sunglasses - although he eventually
would move on from Louis Vuitton and come out with his own line of clothing and accessories.
Of course, the company is not without its issues. Louis Vuitton has an entire team of
lawyers searching for copyright infringement, and they don’t hesitate to sue someone if
they believe that they are copying the brand logo. They have even sued Google for search
results and advertisements leading people to fake bags. Google won the case though,
arguing they can’t control what their users put on the Internet.
Louis Vuitton have also gone on to collaborate with brands like Supreme,
which expanded their demographic like never before. Believe it or not though,
Louis Vuitton actually sued Supreme for copying their logo…Until they realized how profitable a
collaboration would be. Now, Louis Vuitton Supreme items resell for a small fortune. For example,
the leather trunk is on sale for $125,000. Or even an LV Supreme hoodie is over $5,000.
Of course, the counterfeiting problem Louis Vuitton had since the early days
of the business is still an issue for the brand today - They estimate that every year
they lose hundreds of millions of dollars to counterfeit versions of their products.
However, even after being in business for 168 years,
they don’t seem to be slowing down any time soon.
Louis Vuitton continues to be a brand that many people aspire to wear,
and it’s a staple among the rich and famous. Currently, they are the number one fashion
brand in the entire world, valued at $39 billion. With more than 400 stores,
you can find a Louis Vuitton in nearly every major city around the globe.
But what do you think of Louis Vuitton? Do you think that it’s overpriced by all of the hype,
or do you feel that the quality of the products justifies the massive price tag? Comment below,
and then make sure you click on this next video in my series of luxury brands, which is the story
of the orphan who built Rolex, and answers the question: why is Rolex really so expensive? The
Rolex video is the perfect video to watch after this one, so I’ll hopefully see you there. Cheers.