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The Louis Vitton Story

With Fine Craftsmanship and Steep Prices, Louis Vuitton's Leather Goods Are De Rigueur for the Status Conscious
Stewart Toy
From the Print Edition:
Demi Moore, Autumn 96

(continued from page 2)

Many of these luggage tours de force are on display at a Vuitton museum next to the company's original Paris workshop--site of the recent birthday party. They include the lead-lined explorer's bed and hundreds of other pieces of antique luggage, dating back to the fourteenth century, that were collected over the years by the Vuitton family. To visit, one must make an appointment in advance (phone 331/4688-3838).

The workshop, a spotless white-brick building with black steel girders, was opened in 1860 when Vuitton was just getting started. The founder built it in an area that was then open country north of Paris, near the Seine so that wood for steamer trunks could be delivered easily. Eighteen years later, Vuitton built his family home next to this small factory. The home is a stunning mansion with stained-glass windows and plaster Art Nouveau tendrils creeping across walls and ceilings. Now this complex is a quaint anomaly, squeezed into the drab working-class suburb of Asnières-sur-Seine on the northern edge of Paris. It includes a small area where employees can practice setting up window displays.

Vuitton's original workshop is still in use, although mainly to design new models and produce special items. To build trunks and suitcases, craftsmen shape frames from poplar wood that has been dried for seven years. They stitch leather handles and nail brass studs by hand. Most of Vuitton's products are now made in nine other factories, located in France, Spain and Southern California. The company refuses to manufacture in cheap-labor countries of the Third World, allegedly because quality isn't as good, but probably more to preserve a snob image.

The transformation of Vuitton from a small maker of luggage for the idle rich into a broad-based luxury goods company is one of the great marketing success stories of the twentieth century. This feat was largely the work of Henry Racamier, a former steel executive who married a Vuitton descendant and in 1977 was named to run the family company.

A keen businessman, Racamier saw that Vuitton wasn't taking advantage of its posh name. True, the company had moved beyond its original luggage franchise by adding more pliable products starting in 1959. Such items became possible after a new coating was developed that protected cotton canvas from wear and tear, and thus met Vuitton's tough quality standards. Still, the product line was small. The company didn't bother to advertise, and its distribution channels were limited and poorly controlled. Outside Paris, it had no stores of its own.

Racamier went on an expansion binge to democratize Vuitton's products--up to a point. He opened luxurious stores, broadened the product mix and built a powerful brand image through advertising and promotion of upper-crust events. Between 1977 and 1990, when he left the company, sales had soared more than 50-fold.

This savvy marketer made just one mistake--and it was a big one. It cost him his job, and pushed the Vuitton family out of the company.

In 1987, to further Vuitton's growth ambitions by teaming with a financially strong partner, Racamier engineered the company's merger with Champagne and Cognac producer Moet Hennessy. That was the birth of LVMH. The plan was for Vuitton to stay independently managed, with Racamier at its helm. Almost from the beginning, it was a marriage made in hell. Executives of the two companies bickered constantly over who was in charge, ending up barely on speaking terms.

Their battles eventually erupted into the nastiest takeover fight in modern French history. The winner, in 1990, was Bernard Arnault, a young financial wizard who had worked on Wall Street and then stitched together a textile empire based on Christian Dior. Arnault still runs LVMH. Racamier was forced out, to be replaced by Carcelle, and the Vuitton family sold its 27 percent stake in LVMH. For the first time since the company's birth, the founding family no longer owned an equity stake in Vuitton.

One of Louis Vuitton's heirs is still an executive, however. Patrick Vuitton--a fifth-generation descendant of Empress Eugenie's favorite packer--is in charge of special orders, and also acts as the company's "ambassador" at store openings and promotional events.


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