One would think that Bernard Arnault, the CEO of French luxury conglomerate, LVMH would find it difficult to recover from the whole Galliano debacle that aroused sharp criticisms from celebrities across the board. Galliano was quickly sacked from his position as creative director of Dior for his anti-Semitic slur, but the controversy did not end there. Many in the fashion circle started claiming that this incident was actually a farce, an easy way to get rid of Galliano without paying him $26 million as indemnification for letting him go before the end of their contract. But as the latest sales and profit reports of the company suggest, Arnault was not bogged down by this debacle by even the slightest bit.
Their third quarter sales for this year reached a record high at $368 million and its boutique sales saw a jump of 27% for the first nine months. Arnault infact went all guns blazing this year to strengthen the position of his brands. This included the $6 billion acquisition of Italian jewellery giant Bulgari and increase in his shareholding of French retailer Carrefour and Hermès. Due to the Bulgari acquisition the size of LVMH’s watch and jewerly division has now doubled. His confidence in foresight is reflected by his purchase of 16.02% of Carrefour’s share capital, which has been struggling for some time now. He has also managed to own 21.4% of Hermès’ stake despite much protest from the owning family.
Such acquisitions serve the dual purpose of increasing the size of the company and decrease the competition at the same time. Apart from gains in business, Arnault is gaining much public recognition too as evident from the honours being bestowed on him all over the world. This year he was named Grand Officer of the Legion of Honor of France and was also presented with the Corporate Citizenship award from the Woodrow Wilson International Center for Scholars in Washington. Well, all this just goes to show why he the richest man in Europe, a man who charges ahead despite what you throw at him.