Louis Vuitton Moet Hennessy (usually shortened to LVMH) is the world's largest luxury goods company. It is the parent of around 50 sub-companies that each manage a small number of prestigious brands. The child companies are run, to a large extent, autonomously. LVMH is based in Paris. The group was formed after mergers brought together champagne producer Moët et Chandon and Hennessy, a leading manufacturer of brandy. In 1987, they merged with baggage manufacturer Louis Vuitton to form the current group. Collectively, the group operates around 50 brands.
The group is partly owned by the Christian Dior group, and Bernard Arnault is Chairman and CEO of both companies. His successful integration of various famous brands into the group has inspired other luxury companies into doing the same. Thus Gucci group (now part of the French conglomerate PPR), Prada or Compagnie Richemont have also created extended portfolios of luxury brands.
The oldest of the LVMH brands is wine producer Château d'Yquem, which dates its orgins back to 1593. As of 2003, the group had a turnover of approximately 12bn euros with a net income of 2bn euros. The group is publicly traded on Paris's Euronextstock exchange and is part of the CAC40 index. The group currently employs 56,000 people. The company is headquartered in Paris, and 40% of the staff work in France. LVMH operates around 1,500 stores worldwide. Its current business plan aims to tightly control the brands it manages in order to maintain and heighten the perception of luxury relating to their products. For example Louis Vuitton products are sold only through Louis Vuitton boutiques found in upmarket locations in wealthy cities and in concessions in other luxury goods shops (such as Harrods in London). This practice contrasts greatly with less exclusive brands, such as Tommy Hilfiger, which can be bought in shopping malls around the world.
LVMH said that the new Marc Jacobs brand's leather goods range was generating such interest that it was having difficulty satisfying demand.
A senior LVMH executive said in a statement, "Coach's tactics in filing this compliant and in seeking media attention were nothing but desperate efforts to compensate for the inability of their products, manufactured in regions with cheap labour, to compete with true luxurybrands manufactured in Europe, such as Louis Vuitton.
The success of Vuitton, in the American market for example, sets it completely apart from its competitors; in 2001, Louis Vuitton saw growth of 19% in the US domestic market and 18% growth in the fourth quarter with 75% of this demand coming from local clients, while all its competitors saw demand fall, often sharply.
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