Louis Vuitton is one of the most iconic luxury brands today with its instantly recognizable logo. How did it become such an enviable brand across the globe?
Louis Vuitton has a certain stature. A grandeur only the wealthiest can obtain. An unobtainable allure. It’s subsidiaries like Bulgari, Fendi, Givenchy and many others, ooze luxury. In the last five years Louis Vuitton saw some staggering growth figures. The parent company LVMH had an annual revenue of a whopping $39.6 billion in 2015, growing to $60.1 billion in 2020. Not many companies operating in the fashion and luxury industry can match the success of this behemoth. Today we’ll unravel how it was able to grow so large and become an icon for consumers across the globe.
A changing world
A lot of companies that do not operate in the tech scene have a long tradition and a rich history filled with ups and downs. It’s easy to forget the lengths these companies had to go through to grow as large as they are today. In the on demand media landscape of today we only focus on the present, but the story of Louis Vuitton starts long ago, back in the 19th century.
While Louis Vuitton was building his luxury goods empire, Paris was undergoing extensive reworks under the guidance of Baron Hausmann
In 1837, 16 year old apprentice Louis Vuitton arrived in Paris where he became a craftsman in the atelier of Monsieur Maréchal. Louis worked for 17 years in the atelier, where he learned to build custom designed boxes and trunks for its customers. Eventually opened his own workshop in the same city, at 4 Rue Neuve-des-Capucines. Louis’s business was thriving and he was ready to grow the business. In 1859 he opened an atelier in Asnieres, a commune along the Seine river in Paris, starting out with 20 employees and growing to a 100 in the year 1900. But a year before Louis opened his shop, a key player of the Parissian fashion world entered the scene and turned the city Paris into a luxury brand. In 1858 Charles Frederick Worth opened the first haute couture house in Paris, although it would be 50 years later that the term ‘haute couture’ would be commonplace. The label fashion designer was born, sparking the beginning of high end fashion for women of the upper-class.
While Louis Vuitton was building his luxury goods empire, Paris was undergoing extensive reworks under the guidance of Baron Hausmann, who would transform Paris into the city we know and love today. He began to modernize the city through implementing a contemporary sewage and water system and recreating the impoverished slums, creating symmetry and beautiful facades along the streets, bringing an allure of wealth into the city. The projects envisioned by Hausmann continued to be developed. Several International Exhibitions took place to promote the progress France was making. These exhibitions spread out over 1878, 1889, 1900 and 1937. The Eiffel Tower was constructed in 1889 as a monument and staple of the technological prowess of the nation, all for the world to see during the International Exposition of 1889. While serving as the entrance gateway to the exposition, it had remained in Paris ever since. In 1900 the Alexander III bridge was constructed, one of the most iconic bridges in the city. Paris was becoming a cosmopolitan hub.
You might be wondering why the development of the city had anything to do with the growth of Louis Vuitton, but it’s crucial for how Paris was becoming a noteworthy player on the global stage. People flocked to the city and Paris started to grow rapidly in a relatively short amount of time. In 1835 the urban area housed about 1 million people, growing to 2 million in 1863, 3 million in 1885 and reaching 4 million in 1900. Migrations like these attract all walks of life. From rich elites to opportunists looking to make a fortune. Just like Louis Vuitton, who wanted to become a part of this vibrant city. And with the influx of people, came an influx of money which could only benefit Louis’ sales.
The son that build an empire
Louis Vuitton himself was a true craftsman, but it was his son George Vuitton who would transform the company into a global brand after his father’s death in 1892. He employed different what we would today label as clever marketing techniques, ranging from presenting its products at different shows and fairs, creating storytelling around its products to create value. He was the creator of the now iconic LV logo, which was more than just a pretty esthetique that covered the products. The items of Louis Vuitton were gaining popularity and scammers were out to make a quick buck by selling counterfeit products which were much cheaper, but also inferior in terms of quality. The, in 1896, patented logo added a layer of complexity to the products, making it more difficult to replicate and it made Vuitton products instantly recognizable for potential buyers. It would take 25 years before major steps were made to protect fashion products from counterfeiting practices. The L’Association de Protection des Industries Artistiques Saisonnières began to register haute couture designs.
In 1914 the largest travel goods store in the world, the Louis Vuitton Building was opened at the famous site, the Champs-Elysees
In 1893 George Vuitton presented the company’s products at the World Columbian Exposition in Chicago, which at the time celebrated the 400th anniversary of Christopher Columbus setting out to discover America. In 1894 George Vuitton published the first in a series of many city guides through his book called ‘Le Voyage’. This was 6 years before Michelin would come out with its first edition of its own traveling guide to promote driving and increase tire wear so people would buy more tires. With travelling being promoted by Michelin, they were creating a market for the Vuitton products as well. Elites were ready to go out and about across greater distances. A lot of factors were working in George Vuitton’s favor during this period and he amplified them through clever product promotions at different sights around the world.
At the second edition of the Paris Auto show in 1899 George Vuitton showed his other products. Two years later in 1901 the company introduced the Steamer Bag, a small bag which would neatly fit inside Louis Vuitton luggage. Today we would call this cross-selling, but I doubt back in the day George was aware he was practicing techniques of today. In 1914 the largest travel goods store in the world, the Louis Vuitton Building was opened at the famous site, the Champs-Elysees. The building is a true spectacle to behold not only from the outside with its Art Deco design, but was also marvelous from the inside. Having an atrium of 20 meters high with 1,900 steel polished stems descending downwards.
In 1931 the company introduced a luxurious Crocodile skin handbag and Elephant handbags at the Colonial Exhibition. The Paris Colonial Exhibition was held to give French people the opportunity to discover the different French colonies and obviously promote colonialism. Nonetheless, it must have been a fascinating event of grandeur for the French citizens, to attend an event filled with performances and reconstructions of villages throughout the colonies. The event had nearly 8 million visitors. It was the perfect place for George Vuitton to showcase its products with exocitic materials found in the far away colonies. It’s difficult to pinpoint whether George had schemed all of its promotional activities so diligently, but one thing was for certain, he knew where to show and promote its products. Wealthy travels and exoctic fairs. Louis Vuitton became an integral part of this scene, blanketing it in a shroud of exclusivity.
The story of the lineage after the legendary businessman George Vuitton gets a little more blurry after his succession by his son Gaston Louis Vuitton in 1936. Gaston seemed to have a more bohemian approach to life and the family business. He had a keen eye for the arts and technology such as cars and airplanes. He would lead the company through the great depression where many luxury boutiques at the Champs-Elysees fell.
Real change came in 1987 when the conglomerate LVMH was created, led by Bernard Arnault, who came from well-known luxury brand Christian Dior. The conglomerate was a merger between Louis Vuitton and Moet-Hennessy. But the company couldn’t have grown into a worthy business to merge with without the help of Henry Racamier who grew the company from $14 million in sales to a $1 billion company with 2,500 employees. But Arnault’s moves to merge the companies and turn it into a luxury powerhouse were not received with open arms according to an analysis done by the New York Times, saying, ‘Arnault has won the grudging envy of many Frenchmen because he epitomizes the new generation of aggressive young European businessmen, who scramble to seize power, rather than wait for someone to hand it to them.’ His bashfulness was unbeknownst to the traditional French style of doing business and this American way of thinking felt like heresy.
Under the leadership of Bernard Arnault, LVMH began quickly acquiring multiple luxury brands into its portfolio. In 1999 Prada and Louis Vuitton teamed up to buy Fendi, a well established brand from 1918, with designer Karl Lagerfeld on board designing furs and leather goods. The price has not been disclosed, but the deal was reported to be worth around $850 million. In 2008, LVMH acquired Swiss watchmaker Hublot. LVMH said about the acquisition, “Hublot is a brand that is highly complementary to LVMH’s existing watch portfolio comprising TAG Heuer, the world leader in prestigious sport watches and chronographs, the Swiss Watch Manufacturer Zenith, Dior Montres, Louis Vuitton watches sold exclusively in Louis Vuitton stores, and the watch collections of jewellers Chaumet, Fred and De Beers.”
In 2019 LVMH acquired Tiffany & Co. for a whopping $16.7 billion. Arnault said about the deal, “LVMH intends to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons. We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.” Tiffany & Co. was founded in 1839 in New York City, selling luxury goods such as watches, clocks, jewelry and silver. At the time of the acquisition the company had over 300 stores globally where under the leadership of Alessandro Bogliolo, former CEO of Bulgari, which was also acquired by LVMH, started to expand in China and Hong Kong.
Advertising the Louis Vuitton way
Louis Vuitton has grown out to be a major player in the luxury and fashion scene, but it didn’t happen overnight, and it certainly didn’t happen without advertising. LMVH is no slouch when it comes to advertising and through its many collaborations with advertising powerhouse Ogilvy, it created notable campaigns featuring celebrities like Sean Connory, Keith Richards and Mohammed Ali. The campaigns may be subtle in their nature, but feature legends that embody success, legacy and strive.
In 2008 the company launched its first TV and cinema campaign. The campaign, created by Ogivly & Mather would be a 90-second ad displaying its products in an “intensely atmospheric representation of travel, harking back to Vuitton’s core offering of luxury leather luggage.” in the words of Marketing Week. In 2012 Louis Vuitton launched a global television campaign featuring model Arizona Muse, further pushing its traveling message across the world. Through its campaigns it wants to stay true to its traveling heritage and emphasize superior quality. Although it hasn’t always gone according to plan. Back in 2010 the Advertising Standards Authority confronted Louis Vuitton and Ogilvy where it released an ad where a seamstress was handcrafting the products, an apparent far cry from the actual production process. While not being technically misleading, the company was not invincible.
In 2013, at the end of the economic crisis, where many luxury brands were hit by decreased consumer spending, LMVH went into overdrive to further establish itself as the top luxury goods company. Marketing Week says, ‘LVMH is focusing on making its products even more exclusive, launching products with fewer logos and more precious metals in a bid to appeal to the wealthiest shoppers while driving up prices and improving profits margins.’
A rich history
Louis Vuitton has been around for quite some time and just like many of its old day counterparts, it started with humble beginnings. A craftsman making qualitative goods on a small scale and along came his son who turned out to be quite the salesman and expanded the family business onto the global arena. We also can’t understate the movement of the times as the world got more connected, travel became a notable pastime for the elites and Paris fashion took flight. The Vuitton company and its products were riding the wave that was gaining momentum.
But the company remained relatively modest until it truly became a luxury goods conglomerate through the opportunistic management of Bernard Arnault, who dared to rethink how the traditional French brand could be reshaped for a world of tomorrow. Through its mergers and acquisitions the brand grew fast and large. It grew an extensive portfolio of brands, diversifying into different markets. A smart move that every business should aim to accomplish. One might argue if it’s smart to only aim for the luxury market and not downwards, to increase the amount of potential buyers. But I’ll let you decide whether this is a durable business model.