Bernard Arnault, made in 1984
An empire built on luxury is ultimately an empire of futilities . Brands are nothing but fleeting air.
At LVMH’s annual shareholder meeting, Bernard Arnault asserted with confidence that raising taxes on French multinationals—renowned for their adept tax optimization—equates to taxing the essence of "made in France." Small business owners, lacking the resources to engage legions of corporate lawyers and tax advisors, end up shouldering a disproportionately higher tax burden in France compared to LVMH.
A substantial share of LVMH’s luxury goods is produced outside France. Notable exceptions include wines and spirits, designated as Protected Geographical Indications (IGP) and thus inseparable from their French origins, as well as authentic artisanal crafts. These crafts resist outsourcing, demanding years of rigorous apprenticeship to achieve mastery.
In the United States, claims of taxes dropping to 15% ring hollow. Bernard Arnault is stretching the truth. While he did secure an invitation to Donald Trump’s inauguration, no concrete evidence suggests U.S. corporate taxes will fall to or by 15%. In 2024, the effective corporate tax rate in the U.S. stood at 9%.
Mr. Arnault would do well to recall that the global minimum corporate tax rate of 15% is a G7 commitment, not a whim subject to Trump’s influence. His real concern should lie elsewhere: Trump’s promised tariffs. These threaten to strike LVMH hard, a company that—to our knowledge—produces little in the U.S., save for select Tiffany & Co. items, acquired for $15.8 billion in 2021. Wines, spirits, perfumes, cosmetics, handbags—these perennial targets—face exposure as Trump pushes to swap taxes for tariffs.
Arnault appears anchored in a bygone era—the 1980s and 1990s, the heyday of yuppies. Think celebrities, Cannes, supermodels, Saint-Tropez, the Palace, Bains-Douches, superyachts, endless parties, and abundant excess. "Brands" thrive on advertising, tethered to mass media—both, thankfully, in decline. Especially those under Arnault’s banner. Le Parisien? A reported €24 million loss in 2024. Les Echos? €6 million in the red, with layoffs looming (framed as "voluntary departures"). Paris Match, freshly acquired from Arnaud Lagardère? Its readership skews over 65, and it’s become a national punchline for defending the Macron duo.
Social media and independent press have shifted the landscape. Convincing the average person that a Christian Dior T-shirt buys entry to the VIP lounge is a tougher sell than ever. Contrary to the myth, LVMH isn’t among France’s top employers—its 40,000-strong workforce pales beside Carrefour’s tenfold headcount or Vinci’s threefold. Its selective distribution arm, notably Sephora, is stumbling. The sheen of its "brands" has dulled: Louis Vuitton now risks signaling gangster vibes, Kenzo feels tacky, and Christian Dior evokes the likes of Gabriel Attal or Olivier Véran—two of France’s most reviled political figures.
Bernard Arnault is less an industrialist or entrepreneur—think Vincent Bolloré or Rodolphe Saadé—and more a financier. His empire owes much to state generosity (thank French taxpayers) and tactics long viewed with skepticism. For a fuller exploration, see our article below.
Nor can we ignore the curious flirtation with "woke" culture at the Olympic opening ceremony, a high-profile platform where LVMH, summoned by Emmanuel Macron, stepped in to rescue an event plagued by the organizing committee’s sponsorship struggles. The spectacle of a blue satyr in a thong drew global mockery or dismay, tainting LVMH’s brands with an unwelcome sheen of ridicule.
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“It is a trend for the last ten years for brands to get together, for one simple reason. It is the world market, to be reached globally, that requires a much greater investment. One brand alone will have great difficulty, When you buy Dom Pérignon or Dior perfume, or a Vuitton bag, you don’t know it belongs to the same group. It is only backstage that you find the economies of scale that is the basis of our success.” stated Bernard Arnault to the New York Magazine in 1999.
Economies of scale? For "brands," these were historically forged through marketing—namely, the mass acquisition of advertising space in global media. That era has drawn to a close. Beyond this, LVMH’s economies of scale scarcely outstrip those of other industries.
The tangible retreat of globalization, alongside rising international skepticism toward Western values, hints that LVMH’s towering market capitalization may not shield its luxury goods from the gathering storm. The mystique of luxury no longer captivates the masses. Those who once fueled LVMH’s revenue—cautious spenders dipping into hard-earned savings—are increasingly priced out and growing more selective. They opt for less, but with sharper discernment.
True luxury now lies in rejecting logos, sidestepping the extravagance of dropping tens of thousands of euros at the Louis Vuitton boutique in Gstaad—a playground for Russian oligarchs and the detached ultra-rich. This marks a deeper cultural shift. For men, it’s commissioning bespoke suits from masters like Cifonelli in Paris, Henry Poole or Edward Sexton in London, Gaetano Aloisio in Rome, or Pino Peluso in Naples, paired with shoes from artisans such as Pierre Corthay, Stefano Bemer, Norman Vilalta, or Gaziano & Girling.
For those beyond bespoke’s reach, industrial made-to-measure options from Lanieri, Pini Parma, or Julien Scavini deliver superior quality at a fraction of the cost of off-the-peg "designer" fare. On women’s fashion, the author cedes the floor, disclaiming expertise.
Scrutinize LVMH’s portfolio: beyond real estate (languishing, notably in the U.S.) and land holdings (like vineyards), most assets are intangible. Manufacturing exists, but its industrial footprint is modest, diluting its value. A brand’s worth hinges on the attention it sustains—and that attention is fleeting.
Compare this to the concrete assets of others: Elon Musk’s satellite constellations, electric vehicle plants, rocket facilities, and a platform shaping Western political discourse; Rodolphe Saadé’s shipping fleet; Vincent Bolloré’s archives of rare books, music, and films; Xavier Niel’s telecom networks; or the Dassault family’s aerospace factories and CATIA software. LVMH epitomizes France’s malaise—favoring veneer over substance, gesture over action.
Bernard Arnault, perched in a financial citadel propped up by banks and political cronies, may find his empire echoing the fate of Boussac—the faltering textile giant he scooped up with French state aid in 1984, forming LVMH’s nucleus. In the end, the consumer holds the gavel.