In 2017, Arnault Bought all Christian Dior Shares for $13.1 Billion

The $13.1 billion takeover of Christian Dior by billionaire businessman and owner of LVMH Bernard Arnault in 2017 sent shockwaves through the luxury fashion industry. This strengthened LVMH’s position as the largest luxury goods company in the world by allowing it to completely include Christian Dior into its portfolio of luxury brands.

Since then, Arnault has laid out plans for Christian Dior’s growth and expansion, which may have far-reaching effects on the industry as a whole. The brand’s success, however, will depend on its ability to overcome obstacles like the stiff competition in the luxury market and the fallout from the COVID-19 pandemic.

Who is Bernard Arnault?

French art collector and multibillionaire businessman Bernard Arnault also serve as Chairman and Chief Executive Officer of LVMH Mot Hennessy Louis Vuitton SE, or just LVMH.

Background and Early Life

On March 5th, 1949, in the French city of Roubaix, Bernard Arnault entered the world. His mother was a musician, while his father had a construction business. He earned his degree in engineering from the prestigious Γ‰cole Polytechnique in Paris. Afterward, he earned a Master of Business Administration from Paris’s Γ‰cole des Hautes Γ‰tudes Commerciales.

Career and Success

In 1971, Arnault got his start in the workforce at Ferret-Savinel, the construction firm owned by his family. After purchasing Christian Dior in 1984, he went on to become CEO of LVMH, the business founded when Mot Hennessy and Louis Vuitton merged the following year.

Arnault has led LVMH to become the greatest luxury goods firm in the world, with over 70 luxury brands in its portfolio. These brands include Louis Vuitton, Dior, Givenchy, Fendi, and Bulgari.

Many people credit Arnault’s success to his business savvy, his ability to spot and purchase up-and-coming luxury businesses, and his insistence on maintaining a commitment to quality and handiwork. In 2021, he has a projected net worth of about $160 billion, making him one of the world’s wealthiest individuals.

Role in Luxury Fashion

Many people consider Bernard Arnault to be the single most important person in the history of high-end fashion. With his guidance, LVMH has grown into a powerhouse in the luxury goods market, and he has been instrumental in the company’s acquisition of several well-known fashion labels.

Arnault is well-known for his advocacy of new fashion designers; through the LVMH Young Fashion Designer Prize, he has launched the careers of numerous aspiring designers. He is also well-known for his role as President of the Fondation Louis Vuitton, an organization that works to spread awareness of and appreciation for modern and contemporary art and culture.

Christian Dior and Its History

Founding and Early Years

French haute couture house Christian Dior was established by its namesake designer in 1946. Dior, who opened his own design brand after working as a gallery owner and fashion illustrator, was born in Normandy, France, in 1905.

The “New Look,” the name given to his groundbreaking 1947 debut collection, ushered in a new era of elegance for ladies everywhere. Instantly iconic, the collection catapulted Dior to the top of the fashion world.

Expansion and Growth

Dior’s expansion of his fashion empire into accessories and perfumes followed the success of his debut collection. In the 1950s, Dior made his name known over the world by opening stores in New York, London, and other important cities. With Christian Dior’s untimely death in 1957, his associate Yves Saint Laurent took over the company and eventually became a famous fashion designer in his own right.

Christian Dior has grown and changed over the years, thanks to the contributions of various art directors who have each brought something fresh to the table. While LVMH, the largest luxury goods corporation in the world, purchased the label in 1996, it continues to be one of the most famous and important fashion houses in the world.

Importance in the Luxury Fashion Industry

The Christian Dior label is largely considered to be among the most influential in the history of high fashion. After the war, Dior’s “New Look” completely reimagined the way women dressed, and his legacy lives on in the industry to this day.

From Marilyn Monroe’s version of “Happy Birthday” to John F. Kennedy’s in a Dior gown to Princess Diana’s notable appearances in Dior outfits, the brand has been linked to some of the most memorable events in the history of fashion.

Christian Dior’s inventive designs and commercial practices have set a new benchmark for luxury brands, and the company has played a significant influence in the growth of the luxury fashion sector.

One of the most prestigious names in fashion, the label is now widely recognized for its haute couture, ready-to-wear, accessories, and fragrances.

The Buyout

Explanation of the Purchase

According to media reports, LVMH spent $13.1 billion to acquire the remaining non-LVMH shares of Christian Dior in 2017. Since LVMH already controlled Christian Dior Perfumes & Beauty, this deal gave it full ownership of the Christian Dior fashion label and the Christian Dior Couture business.

The deal was structured as a simplified tender offer, in which LVMH made a voluntary bid to purchase Christian Dior shares at a premium price. The deal closed in September 2017, and LVMH now wholly owns Christian Dior.

Significance of the Purchase

The final purchase of Christian Dior shares by LVMH marked a watershed point in the development of both firms and the luxury fashion industry as a whole. The acquisition of Christian Dior solidified LVMH’s position as the leading luxury goods manufacturer in the world.

As a result of the acquisition, Christian Dior gained access to LVMH’s resources and knowledge, boosting its ability to compete in the high-end fashion industry. Moreover, LVMH was able to fortify its foothold in the beauty and fragrance industries, where Christian Dior is well-established.

Impact on the Luxury Fashion Industry

There was a major shakeup in the high fashion market after LVMH acquired the remaining Christian Dior shares. That was indicative of how the industry has grown increasingly dominated by consolidation and the formation of mega-luxury corporations in recent years.

As a result of the purchase, LVMH now owns one of the most recognizable and important fashion houses in the world, further solidifying its position as a market leader in the luxury fashion sector. This enabled LVMH to capitalize on the popularity of the Christian Dior name across all of its divisions, from clothing and accessories to cosmetics and perfumes.

Arnault’s Future Plans for Christian Dior

Plans for Expansion and Growth

Bernard Arnault, the current owner of Christian Dior, has laid forth ambitious goals for the development of the company. Arnault wants a bigger piece of the fast-expanding online luxury industry, and one area of focus is expanding Christian Dior’s e-commerce skills.

The opening of new Christian Dior outlets in strategically important regions like Asia and the Middle East is another area of concentration. Arnault also plans to expand Dior’s presence in the fragrance and beauty industries by capitalizing on the brand’s widespread recognition to increase sales in those sectors.

Potential Impact on the Luxury Fashion Industry

The future of Christian Dior, and Arnault’s aspirations for it, may have far-reaching consequences for the luxury apparel industry as a whole. With more online and physical locations, Christian Dior has the potential to further cement its position as a leader in the luxury goods industry.

Christian Dior’s sustained emphasis on scent and beauty may have wider repercussions for the industry as a whole, since the label’s success in these areas may encourage competing high-end labels to do the same.

Challenges and Obstacles

Despite Arnault’s best intentions, the Christian Dior brand may face a number of difficulties in the near future. The luxury apparel sector is notoriously cutthroat, with only a handful of multinational corporations vying for consumers’ dollars.

In addition, the luxury apparel business has been hit hard by the COVID-19 pandemic, with many firms battling to sustain sales and profitability in the face of store closures and lower customer spending. In order to thrive in the years to come, Christian Dior will have to overcome these obstacles and adjust to the ever-shifting nature of the market.

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