The Finance Foundation
Reinventing capitalism for all
AUTHOR
Michel
Gabrysiak
President of the Finance Foundation

Bernard Arnault and LVMH are still kings in a 1,3 billion euros luxury industry
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On a side street off the Champs Elysées and Avenue Montaigne, a man comes out of a car, quickly, and enters a nondescript door and building. Nobody seems to pay attention.
He is Bernand Arnault, the master of Louis Vuitton Moet Hennessy, LVMH, and many others. His brands are very well known worldwide. He just bought a good cashmere manufacturer from Italy, Loro Piana for 2.6 billion euros.


His advertising campaigns are gigantic. He is one of the big shots of the luxury business. Yes, but how big?
    
LVMH is a 33 billion euros group. Quite remarkable. Generally, luxury is allocated 380 billion euros sales per annum.
But a recent study by BCG, Boston Consulting Group, explains that luxury worldwide is a 1.8 trillion dollars business; that is 1.3 trillion euros. Wow!
That number may seem surprising.


Where does the difference come from?


From the small and medium sized brands and companies. They operate, not only in shoes, and bags, and dresses, but in 5 star hotels and restaurants, yachts, holiday organisations and 20 other activities.


One of the biggest luxury activity is in cars with 320 billion euros last year; technology accounts for 150 billion euros; watches and jewellery 120 billion. And there is
cosmetics, alcohol, food, furniture.

A myriad of craftsmen, artists, decorators, cooks, florists etc.


The sector seems to grow at an exceptional rate: from 11 to 14% a year.


The number of clients is increasing because of China, India, Mexico, Brazil, the Russian oligarchs and the African rulers.


The big luxury cities are still Paris, London, Zurich, Berlin, and Munich in Europe;  New York, Los Angeles in the States. Shanghai is moving up, but comes as number 16, while Boston and Philadelphia are in the top 15 worldwide.


That is certainly very good for the 1% who can afford the most expensive extravaganza.
And it certainly makes up for a big and mighty industry and commerce.

 

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